FoxDavies Daily Monitor - MEO Australia, San Leon and Antrim Energy
Thursday, March 29, 2012
MEO Australia (BUY, A$0.60) (MEO AU, A$0.30, ▲ 7%) - Tassie Options Open: The Australian government's extension of the Environmental Approval provides further support to Management's drive to create value for shareholders. While supportive, the main focus remains the drilling programme outlined for the next 12 months, targeting prospects and appraising discoveries, which, given the fact that the Company is trading at a small premium to its cash balance would ultimately prove transformational. We recently initiated on the Company with a BUY recommendation and A$0.60. In this news:
- Timor Sea LNG project approval previously granted now extended by Australia's Federal Department of Sustainability, Environment, Water, Population and Communities until at least March 2017.
- Brings approval in line with features now standard following recommendations from the Montara Incident Inquiry
San Leon (BUY, 60p) (SLE LN, 10.5p, ▶ 0.0%) - Offshore Morocco Resources Estimates: This news provides investors with the sense of scale that the Company is targeting offshore. The Foum Draa and Sidi Moussa permits currently contribute 3p to our overall NAV of 60p. We are due to meet with Longreach this afternoon, who released today's independent estimates, and we will be updating our outlook post this meeting. Safe to say that today's news highlights that SLE's portfolio consists of more than just Polish Shale. We reiterate our BUY recommendation and 60p price target. In this news:
- Estimates for 14 identified prospects and 8 additional leads
- Prospects Triassic to Paleocene in age
- Variety of trapping mechanisms:
- Tilted fault blocks
- Stratigraphic pinch outs
- Salt related traps over and against salt diapir flanks.
- Reservoir rock mainly sandstones, but also shelf edge Jurassic carbonate plays
Antrim Energy (AEY, 66.5p, ▶ 0.0%) - Today's results highlights what has been a very strong year for Antrim, with the Company entering 2012 in a better cash position and with a fast growing core with which to provide ammunition for future growth. The Company will be hoping for another strong performing year as it embarks on an active programme which includes finalising the sale of Antrim Argentina, bringing the Causeway field online, submitting the Fyne Field Development Plan (FDP), spudding a well on the Kerloch Licence , and finally another exploration well on the Cyclone Prospect in the Greater Fyne Area. In the news:
- Causeway Field Development Plan (FDP) approved by DECC, with first oil expected in Q3 '12
- In the Greater Fyne Area; drilled first Erne well and second Erne sidetrack
- TAQA farm-in on Contender Prospect
- Awarded Irish offshore option
- Closed bought deal financing of $52million.
- Sale of Antrim Argentina to Crown Point Ventures Ltd
- Agreement with Valiant to develop Fionn field (Central Causeway)
- The Company drills East Fyne appraisal well with Premier Oil
- Current unrestricted cash position of $43million and no bank debt.
President Petroleum (PPC LN, 60.5p, ▲ 11%)-Successful drilling result: The success of the 2nd well, DP-100, at Dos Puntitas Field will increase the production from the field and also presents the possibility of upgrading oil in place and reserves estimates. It has identified a gross oil column of 54 metres at a depth of between 3115 -3169 metres with a net pay of 33 metres in the well. The Company will commence testing in next few days and plans to start production from April. It is confident of flowing in excess of 380 bopd pre drill estimates following the discovery of the high end hydrocarbon saturations with good matrix porosity. Today's news bodes well for the share price and updates on DP-1001 well and Dos Puntitas Field will provide near term catalysts. In this news:
- The 2nd well -DP-1001 drilled at Dos Puntitas Field.
- President will test three reservoir intervals, all of which appear capable of primary production not requiring fraccing or artificial stimulation.
- The deeper two zones are A5 and A6 sandstones, themselves capable of initial flow rates well in excess of the pre-drill prediction.
- The upper Limestone interval is also expected to contribute to immediate production.
- A location has been chosen for the third well (DP-1002) of the 2012 five well programme, which demonstrates the same characteristics as DP-1001.
- Third well is expected to be spudded within the next 14 days.
Ithaca Energy (IAE LN, 203p, ▲ 5.73%)- Double Delight!: The Company has reported a 9% increase in 2P reserves to 50.2 mmboe along with strong 2011 financial results. Ithaca capital investment for 2011 stood at an impressive $205mm. We believe 2012 will be an exciting year for the Company with: first oil production from Athena development expected to commence in Q2 2012; commencement of development drilling at the Stella and Harrier fields; spudding of the Hurricane appraisal and full year production contribution from Anglia, Topaz and Cook fields. In this news:
- Export production of 4,370 boepd for 2011 including production from the effective date of the acquisitions.
- Profit before tax of US$37.1 mm (2010 Reported: US$38.0 mm, IFRS adjusted US$58 mm).
- Cashflow from operating activities of US$103.5 mm (2010: US$88.9 mm).
- Cash US$112.1 mm (2010: US$201.9 mm), inclusive of US$16.5 mm restricted cash
- Net 2P Reserves Pre-Tax Net Present Value US$1.085 billion (2010: US$912.40 mm)
- Completed two material acquisitions: 28.46% of the Cook Field; 100% of Challenger Minerals (North Sea) Ltd
- Taken over operatorship of the Carna discovery and increased the Company's working interest from 16% to 32%.
- Entered into swap options to sell 768,800 bbl of the Company's March 2012 - June 2013 forecast production at an average price of $116.07/bbl.
Oilfield Services News
Technip (HOLD) (TEC, EUR85.0, ▼ 0.8%) Technip has announced the award of a contract by Bluewater Industries for the Cheviot field development, whose operator is ATP Oil & Gas. The Cheviot field is located in Block 2/10B, approximately 100km East of the Shetland Isles, in the UK North Sea, at a water depth of 150m. The project also includes the development of the Peter and Eclat fields. The project is scheduled for delivery in 2014.
Written by Steven Asfour, Sales Trader at Fox-Davies
This article is for information and discussion purposes only and does not form a recommendation
to invest or otherwise. The value of an investment may fall. The investments referred to in this
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