Headlines
In Brief:
LGO Energy (LON:LGO – 0.12p) – Operational Update
Nighthawk Energy (LON:HAWK – 1.35p) – Directionless Production Update
Tower Resources (LON:TRP – 2.38p) – Comet Transaction Sharpens Focus
Zenith Energy (LON:ZEN / TSX:ZEE – 10p/C$0.15) – Zenith Commences Azeri Programme
In Brief
LGO Energy (LON:LGO – 0.12p) – Operational Update: Today's update provides a timely update on the Company's Trinidadian operations, and in providing guidance on the forward programme, restarts the development of the wider Trinidadian acreage that has been under moratorium since the lost tool in well GY-678 and the dip in the oil price. We believe that the Company is now well set to regain its momentum.
Nighthawk Energy (LON:HAWK – 1.35p) – Directionless Production Update: With each update the Company seems to drift further away from its outlined plan of the 10th of March 2016. While the underlying production may be declining, the management need to be more fulsome in outlining what's happening to arrest the decline and more specific in terms of what's coming to reverse it. We believe that in not being more fulsome in their announcements for so long leaves them open to the charge that they are uncertain of what to do next. We are concerned that the Company is becoming directionless in the wake of failure to enhance its production repeatedly and dwindling cash resources. We believe that the management not only needs to redouble its efforts, but keep its owners abreast of the situation.
Tower Resources (LON:TRP – 2.38p) – Comet Transaction Sharpens Focus: Today's news, while trimming the future profile, we believe adds value in that it eliminates a cash obligation against which the Company never received value from the market for anyway. In so doing, we believe that the management have demonstrated a focus on what is realistic, within the context of available resources, strengthens the focus on value creation and underlines the approach required by managements to assess their portfolio impartially, repeatedly.
Zenith Energy (LON:ZEN/TSX:ZEE – 10p/C$0.15) – Zenith Commences Azeri Programme: Today's news that the Company has commenced its work over programme has occurred quicker than we had expected, but to our mind, what is really needed in fields such as these, and especially in Azerbaijan, is a comprehensive plan for pilot study, which then leads to a comprehensive and coherent rehabilitation plan. The is little doubt that getting production above the hurdle rate will start to allow them to have cash flow to reinvest, but what's really needed to generate value is excess cash flow to return to shareholders. We keenly await the plans for the study and redevelopment of the field.