In Brief: Curzon Energy* (LON:CZN) (9p) – $47.9mm (49p) – Progressing as Planned; United Oil & Gas (LON:UOG) (4.25p) – Funding for Next Stage; Nighthawk Energy (LON:HAWK) (0.35p) – Zombie Killer
Curzon Energy* (CZN LN – 9p) – $47.9mm (49p) – Progressing as Planned: Today’s news marks the start of the next phase of the Company’s appraisal programme. Now that flow from the current portion of the wells open to the productive horizons are stabilised, the next stage of the Company’s appraisal programme is about to begin. That the results to date have been in line with previous expectations provides us with further confidence that post the successful completion of the appraisal programme that the Company will be able to report maiden reserves. At this stage, we are reiterating our $47.9mm (49p) valuation.
United Oil & Gas (UOG LN – 4.25p) – Funding for Next Stage: News that the Company has completed its £2.5mm fundraising now allows the Company to pursue its twenty eighteen work programme, which includes the Colter appraisal well, a Wytch Farm analogue, which would most likely be drilled from the existing Wytch Farm well pad and used it infrastructure to produce the oil. While Colter provides the Company with a near-term opportunity for a step change in valuation, investors should not forget that the Company has 20% of Selva (Italy), where the recent appraisal success should be converted, albeit in the medium term, into significant cash generation.
Nighthawk Energy (HAWK LN – 0.35p) – Zombie Killer: Today’s announcement is can officially be marked as the point at which the zombie company known as Nighthawk Energy was put out of its misery. Given the fact that the Company has solicited and received offers for its asset base below the principal value of its outstanding debt, and the creditor has sent the Company a default notice, the Company is now to all intents and purposes in bankruptcy. While there is still time for a fundraising, at this stage it would have to be for the full principal, as anything less will still require the Company to dispose of the asset base, and without that, the Company has no value. Consequently, today’s news is effectively announcing the end of the Company, which has been a zombie since the failure of its behind pipe strategy 2 years ago. The blame for this can rest fairly and squarely on management shoulders, who having spectacularly failed to access “behind pipe” reserves, then followed it up with exactly nothing in over 2 years. So, if you want to look for why this company has failed, it isn’t because of the low oil prices, which was a significant headwind, it’s because management lacked the sophistry to come up with an alternative plan.
