Headlines
- In Brief:
- Volga Gas*** (LON:VGAS)– 54p – $77mm (67p) – Increased Deliverability
- Rockhopper (LON:RKH) – 41p – Sea Lion Murmurs
In Brief
- Volga Gas*** (LON:VGAS) – 54p – $77mm (67p) – Increased Deliverability: Yesterday’s news that production averaged ~24.8mm cfpd, which is marginally below the historical estimated plateau rate of 25mm cfpd. While this is positive, we will maintain our lower long-term productivity estimate until such times as the reservoir performance is fully understood; we are maintaining our current valuation of $77mm (67p).
- Rockhopper (LON:RKH) – 41p – Sea Lion Murmurs: Today’s news that standard bank has been appointed to seek funding for Sea Lion is the clearest indication yet that the FID for the project is approaching fast. The key question is whether Premier Oil think the same. At this stage, this is less of an issue. We take today’s news as an outward sign that there is increasing confidence that an oil price of $50/bbl can be maintained and that both parties are becoming aligned. To our mind this means that the project has come to the point at which progress will start to be made – it’s a question of how fast. We believe that this will be supportive to the share price, but that there will be some headwinds as the uncertainty as the market contemplates the scale of additional cash resources that will be required.
We may provide a further update on one, or all, of the stories above later today. However, if there is anything that you would like to discuss, please feel free to contact us.