- In Brief:
- Cabot Energy*** (CAB LN – 4.30p) – $199mm (22p) – Moving Forwards: Today’s update discloses the progress that the Company is making on its Canadian assets despite infrastructure headwinds. The 2Q entry rate at 950bpd reinforces the merits of taking a measured technical approach to the asset base, and with 200bpd awaiting commissioning in the period, 1H will represent significant progress towards the year-end guidance of 1,600 – 2,000bpd. Of particular interest is the sweet gas from the Bluesky formation, which the Company estimates will add 130boepd. As Bluesky gas is sweet, bar polishing, it will not require any further treatment before sale, unlike sour gas, which must be treated to remove H2S. Our valuation remains $199mm (22p), until such times as we better understand the performance of the Bluesky formation.
- Nighthawk Energy (HAWK LN – 0.30p) – Production update: Today’s production update for February, while demonstrating an improvement over January, continues to tell a sorry tale, when set against the context of the plans that should have been. While this is disappointing in itself, what is a greater disappointment is that another announcement passes and the Company has still yet to deliver any plan for navigating its way out of the mess that it has gotten itself in. While there may well be activity behind the scenes, there has been nothing that gives you the confidence to believe that the company has been coming up with “Plan B,” or “C.” The Company’s owners, the shareholders, need to see that it isn’t just existing for the management’s fees.