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Today's Oil and Gas Update - Eco Oil and Gas, Nostra Terra Oil & Gas and Westmount Energy.

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27 February 2019

Summary

In Brief

 

Eco Oil and Gas (LON:ECO) - 77p

Scene is Set

 

Nostra Terra Oil & Gas (LON:NTOG) – 2.55p

Equity's a Better Use

 

Westmount Energy (LON:WTE) – 10p

Significant Headwind Alleviated 

 

 

News In Brief

​Eco Oil and Gas

(LON:ECO) – 77p 

 

Scene is Set

If there wasn't already enough excitement in the stock ahead of the drilling, the update on the prospectivity indicated by the 51-101 report is set to raise interest levels still further.

 

What is interesting from our perspective is the fact that the potential of Hammerhead is excluded, which given the sensitivity surrounding anything to do with unitisation, is a wise decision. 

​Nostra Terra Oil & Gas

(LON:NTOG) – 2.55p 

 

Equity's a Better Use

The disclosed equity raise, in and of itself, to provide capital against which to negotiate, is not the worst thing to do, as it provides optionality. In this case, however, we believe that the team should go one step further and raise sufficient equity to drill the first well, at least, to test the hypothesis.

 

We say this because of the risk profile, i.e., the number of analogue and offset wells that provide the support to the Mesquite wells suggests that the risks are lower than they would usually be.

 

That way, the positive results will better enable the team to articulate the value and raise the probability of achieving that value, thereby closing the discount between the asset's value and the deemed worth, thereby improving the value flow through to the equity holders.

Westmount Energy

(LON:WTE) – 10p 

 

Significant Headwind Alleviated

The news that the Company is cleaning up its balance sheet is a positive step, as a company has no business having structured credit if it isn't generating sufficient revenues to repay it.

 

Consequently, we believe that in converting to equity, all shareholders will get the benefits accruing to the risk they have been taking to date, which given the impending activity in the companies that it has invested in, is considerable. 

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. 

 

 

 
   

 

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