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Today's Oil and Gas Update - SP Angel's Snapshot of Oil & Gas News

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22 January 2019

 

 

Summary

In Brief

 

Amerisur Resources (LON:AMER) – 19p

Update Points Towards Self Sustainability

Cairn Energy (LON:CNE) – 189p

Indian Award Critical

Calima Energy (ASX:CL1) – A$1.30

Coring Signs Encouraging

Caspian Sunrise (LON:CASP) – 6p

3A Best Foot Forward:

 

 

News In Brief

 

Update Points Towards Self Sustainability

The disclosure of the initial findings of the Company’s independent Reserves audit should make for pleasing reading for investors, as it supports not only the management’s focus on these areas but also a brighter outlook for 2019.

Furthermore, given the scale of the indicated volumes, we believe that the updated work programme will rightly increase its focus on expanding production, and achieving that all important point at which a company’s operations become self-sustaining.

Cairn Energy

(LON:CNE) – 189p

 

Indian Award Critical

The Company’s update provides an interesting insight into the delicate balancing act that is currently facing the Company. While under ordinary circumstances, a producing company with $66mm in cash would be in a solid position, the extent of the Company’s 2019 activity means that it must accurately balance its programme phasing or risk a period of difficulty.

That said, we believe the team to be more than equal to the task, especially that it has undertaken a solid beginning to its risk mitigation programme. What this does do, however, is throw into stark relief the boost that the Company would receive should it be successful in its litigation with the Indian government.

Even a percentage of the $1.4bn outlined would be a boon to the Company and provide it with a great deal more optionality, but in this instance, we believe that if $1 is liable, so is the remaining $1,399,999,999 of it.

Calima Energy

(ASX:AU) – A$1.30

 

Coring Signs Encouraging

The Company’s update on its Montney shale operations discloses that its coring programme is progressing well, and more importantly, that the results are highly encouraging. This data will be used to refine the well design for the pending horizontal well, which is expected to contain a frack of up to 90 stages.

The next stage will be important, as it will be key for determining the extent of the commerciality of the field. 

Caspian Sunrise

(LON:CASP) – 6p

 

3A Best Foot Forward

While the Company needs to remain focused on its legacy assets, we believe that in securing the 3A Best acreage, the Company has secured not only its medium to long term asset base, as to our mind the acreage is best classed as exploration, but any discoveries are likely to be more simple to develop and lower cost too.

In this regard, although earlier in the E&P cycle, it could be that the relative ease with which it can be developed, could mean that 3A Best funds the wider development of its asset base.

 

 

 

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