16th January 2019
Headlines
- In Brief:
- Baron Oil*** (LON:BOIL) – 0.25p – $22.6mm (1.28p) – Wick Dry
- Gulf Keystone Petroleum (LON:GKP) – 210p – Shaikan the Tree
In Brief
- Baron Oil*** (LON:BOIL) – 0.25p – $22.6mm (1.28p) – Wick Dry: The Company has disclosed that the Wick exploration well has failed to intersect hydrocarbons in its target horizons and has been declared a dry hole. While the data will be analysed and any residual prospectivity assessed in the post drilling analysis, following todays news we are adjusting our valuation to reflect Wick’s exit from our analysis. Given that Wick contributed $8.6mm (0.49p) to the Company’s overall NPV(10%), our valuation is now $14mm (0.79p).
- Gulf Keystone Petroleum (LON:GKP) – 210p – Shaikan the Tree: While GKP regularly updates the market and the plans are well touted, this release makes interesting reading in the fact that the company has reaffirmed its commitment to increasing production to 110m bpd is a significant long-term goal. There is now a feeling that the company can now lay claim to the fact that it has left its legacy behind and that it can legitimately look to the future. With that in mind, we believe that management should soon start to look to expand its footprint, leveraging off the cash flow generated by Shaikan. We believe that for the first time in a long time, the company is in charge of its own destiny.