Headlines
• In Brief:
Aminex (LON:AEX – 3.10p) – Ntorya Well Result Allows Future Thinking
Nu-Oil and Gas (LON:NUOG – 0.52p) – Should? Read Won’t
Premier Oil (LON:PMO – 85p) – Relief, But at a Cost
In Brief
Aminex (LON:AEX – 3.10p) – Ntorya Well Result Allows Future Thinking: Today's news is a solid step forwards for the Company as the second Ntorya well (“NT-02”) results should provide greater confidence in the size and scale of the Ntorya field, and now allows the Management team to look more to the medium to longer term, opposed to the near term concerns with cash flow. While the last fundraising still remains a sore point for most, as it was a closed offer with no option to participate, by leveraging off of Ntorya, the longer term value that could be created could provide a salve to that particular pill for its longer term investors.
Nu-Oil and Gas (LON:NUOG – 0.52p) – Should? Read Won’t: Today's placing allows the Company to continue to develop is marginal field initiative, but the “should” in the comments probably belies the fact that Management are themselves convinced that it will not be enough to get it to the position to announce it has secured its first project. This to our mind is a moot point anyway, as the key isn’t first project, but first cash, and on this point, there definitely needs to be further funding required. That said, credit where credit is due, we believe investors should be pleased by the way that Nigel Burton has hacked away at the dead wood projects and refocused the Company on areas where it stands a fighting chance to generate returns. Now all that required now is to continue sharpening the focus and ensuring that there is no repeat, or all the progress that has been mad e thus far will be for nought.
Premier Oil (LON:PMO – 85p) – Relief, But at a Cost: Last week’s news that all of the financial covenants had been successfully renegotiated will be a welcome relief to holders of the equity, with the only “cost,” outside of that related to the financial instruments themselves, seeming to come from the Management’s loss of control over its future direction. While up to $4bn of credit is still available, we believe that access to that will be difficult to achieve, and as the creditor group have demonstrated, they now are effectively setting as the Company's strategic direction, with current management reduced to management of the cash pile and offering up opportunities for the creditors to consider. The key question now is what level the debt needs to be reduced to before the management team gain control over the Company again. While the loss of control over the Company is, to our mind, an acceptable trade-off for continuation of the status quo (in a broader sense), it should not be forgotten that operationally at least, Premier ranks amongst the best internationally, and it is this solid base which will be foundation for its future.