Member Info for Hedgehog100

A positive update today from UPL on one of its UK assets that PPP could potentially acquire:-

31st Aug 2022 9:30 am RNS Dunrobin Update

"Upland Resources Limited (LSE: UPL), the oil and gas company actively building a portfolio of attractive upstream assets is pleased to report the following on activities in the UK specifically the Dunrobin prospect within Licence P2478 in the Inner Moray Firth (the "Licence").



The holders of the Licence ("Joint Venture Partners" or the "JV") are Upland (32% working interest), Baron Oil plc (32% working interest), and Corallian Energy Limited ("Corallian") (36% working interest). Corallian are Licence Operator; Baron Oil plc has the role of technical overseer in relation to the Licence's remaining Phase A work commitments ...

Technical Studies

3D seismic reprocessing and geochemical studies covering Dunrobin and other prospects within Licence P2478 in the Inner Moray Firth have been delivered with a significant uplift in data quality believed to have been achieved.

The interpretation of the revised data began on schedule in July 2022. An updated prospectivity evaluation is anticipated to be available during Q4 2022, which will provide sufficient time for the Joint Venture partners to consider options, potentially including engaging with prospective drilling and funding partners, ahead of the July 2023 'drill or drop' licence decision. ..."

https://www.lse.co.uk/rns/UPL/dunrobin-update-x60ftw8cdqupdwe.html

Thanks NicetoMichu.
There's a lot of quality posters here, including yourself, who are very appreciated by myself.

ZEN in London has at least closed up on the day, at 1.06p, even if the rise is just 0.9%.

Moreover, the ZEN volume in Oslo recently has been huge: there's been some serious money going into this share, suggesting that it's a rise based on real substance.
Today alone, 61,202,260 Zenith Energy shares have been traded in Oslo: that's the equivalent of over £700K., in a single day.

Probably some people were hoping for a higher revenues figure for last year, but ultimately the recognition of oil revenues is just an accounting policy: it doesn't actually alter production, or cashflow.

And in my opinion it's no bad thing that the share price rise is taking a bit of a breather after its recent advances, as it makes for a more sustainable rise.

I think that most people here would be delighted with 3p/share by the end of the year, which would be a more reflective fair value of the prospects.
Well, an average rise of 0.5p per month, September - December, would achieve that: barely 0.1p per week.

I can only really see good news coming here over the next few months: climbing electricity, gas, and oil prices, increasing production, and probably some big corporate developments too.

"116,000 barrels in storage, plus $6.4m sold on the 22nd April - totals $17.4m @$95 per barrel."

Florida,

Re the 116,391 barrels held in storage as at 31.3.22: I think this was roughly split between the c. 62,000 barrels sold on 22nd. April for c. US$6.4M., and this:
"A second international crude lifting for a quantity of at least approximately 52,000 barrels of oil produced from the Company's 22.5% working interest in the Sidi El Kilani concession (onshore Tunisia) is expected to take place in June 2022."
https://www.lse.co.uk/rns/ZEN/lifting-of-tunisian-production-us64-million-vjrgrg261mtpkie.html

I.e. your figure of $17.4M. contains some 'double counting'.

Though of course further production since 31.3.22 could also potentially be sold by the end of September, to be included in the interim results.

So that figure of US$17.4M. in H1 oil sales could still potentially be met, or even exceeded.

A near thirteen-fold increase in annual revenues, though I believe it could perhaps been even more, if some more recent production had been counted earlier on an accrual basis.

In holding them over to the current half year though, it obviously means that results for the current half year will be much better than otherwise.
And also that results for the current year will have a lower basis of comparison, which will also increase the year-on-year increase.

The current half year ends in a month, and the interim results were reported on 1st. December last year.

"Accrual Method
The accrual method means that you recognize income when the oil or gas is produced and expenses when the expense is incurred. So gas produced in March would be March revenue even though you might not receive the payment from the first purchaser until May. Expenses are incurred when you receive the bill for the expense instead of when you pay the bill."
https://blogmain.sherware.com/2015/05/26/oil-gas-accounting-101-accounting-methods/

Are ZEN apparently so keen share these results that they just couldn't bear to wait another day?!

Though it could also help to avoid 'bunching' important news too closely together.

Ideally it's best to allow a couple of clear days between big RNSes ... so announcing the results on Tuesday instead of Wednesday gives a bit more leeway for this: e.g. another important announcement this Friday, for the weekend.

"FINANCIAL YEAR 2022
30.08.2022 - Annual Report
12.10.2022 - Annual General Meeting"
https://live.euronext.com/en/product/equities/CA98936C1068-MERK#CompanyPressRelease-11822272

ZEN appears to have just brought forward their full year results announcement by one day, from the 31st. August.

Which probably removes the opportunity to top-up on the London Stock exchange in advance.

Although this can still be done by Brits on the Oslo exchange tomorrow, if you have a broker who offers foreign dealing on that exchange, and includes Zenith Energy as one of the available share for this.

NOK 0.1288
CLOSED
26/08/2022 - 16:25 CET
Since Open
+0.0038 (+3.04%)
Since Previous Close
+0.0048 (+3.87%)
https://live.euronext.com/en/product/equities/CA98936C1068-MERK

Zenith Energy has closed for the week at NOK 0.1288, a rise of a few per cent today, and a new 2022 closing high.

Volume was again huge, at 26.47M. shares traded, making over 140M. this week.
That's about 7.5% of the ZEN shares in issue.

ZEN in London, in contrast, is still below its 2022 closing high of 1.075p, and its volume today of 2.327M. shares traded was under a tenth of Oslo's.

NOK 0.1288 equates to c. 1.125p, so ZEN in London has a bit of catching up to do.

And perhaps even more so after Monday, when the London Stock Exchange will be closed for the bank holiday, but Zenith Energy in Oslo will still be trading.

ZEN in London now has just one trading day left before ZEN's full year results on 31st. August.

"Hedge. Unfortunately I bought in in March 2017 at 11.55 and have consistently averaged down over the past few years.
I still need the price to get to around 3 p to break even ..."

Rugs,

ZEN could potentially have been a very good investment from 11.55p, if circumstances hadn't conspired against the company.
You have to accept that there's an element of uncertainty and luck in business and investment - there are never really any guarantees in this game.

But recovery to 3p is a lot more achievable than 11.55p.
For a penny share to quickly treble is not that difficult or unusual, especially from an undervalued position, and with big news.
It can happen in just one good day ... although it tends to take longer, as rises tend to occur in stages.

Increasing about twelve-fold though is a lot more difficult, and is probably more of a long term aim.

Of course because of prior dilution, a recovery to 11.55p would be a far higher market cap. than when ZEN was there previously.

£216M. based on the current number of shares in issue.

For a mid-tier O&G company though, becoming which is ZEN's aim, you would expect a market cap. of at least £100s of millions.

"Zenith Energy’s aim is to become a mid-tier, Africa focussed E&P company"
https://www.zenithenergy.ca/about/strategy/

When ZEN floated on the London Stock exchange in January 2017, at 7p/share, the oil price was barely half of its current level.

And indeed it's only in the last year that the oil price has made a concerted breakout about that level.

These higher prices clearly make it far easier to achieve good profitability, and of course helps overall sector sentiment.

But ZEN was very cleverly able to pick up outstanding assets at depressed prices, and is now reaping the rewards of its shrewdness.

"Today's top riser is Rockhopper Exploration (RKH), another AIM O&G company."

Sorry for mistakenly suggesting yesterday than ZEN is AIM-listed: it is of course main-listed in the UK:-

"Market
Main Market"
https://www.londonstockexchange.com/stock/ZEN/zenith-energy-ltd/company-page

But like AIM shares, ZEN buys don't incur stamp duty, unlike most main-listed shares.

I'm not sure why this is the case, but perhaps it's because the share is dual-listed in Oslo, and London isn't deemed to be its main listing?

It tends to be a very bullish sign when existing long-term shareholders are topping up, as the price is rising, as they are the ones who know the company best, so are well-equipped to recognise the start of a big bullish move, and outing of value.

This is especially the case with shareholders who have previously sometimes been critical.

Republic of Congo is the newest member of OPEC, having joined as recently as 2018, and is one of just 13 member countries.

This is a sign of the country growing stature as an important O&G producer.

And indeed the country has proven reserves of 1.6 billion barrels.

https://en.wikipedia.org/wiki/OPEC#Current_member_countries

The country is clearly very serious about developing its reserves, and developing the Tilapia field is an obvious priority: the field looks to be the country's only O&G permit area that straddles onshore & offshore:-

https://www.zenithenergy.ca/operations/republic-of-the-congo/

It looks an absolute peach of a project, and acquiring it was a quite stunning coup.

LSE % Gainers Top Lists
EPIC Name %
RKH Rockhopper Explor... +86%

Today's top riser is Rockhopper Exploration (RKH), another AIM O&G company.

It's shot up this afternoon to a market cap. of over £90M., on a positive lunchtime RNS, and had more than doubled today at one point.

ZEN seems to make a habit of intra-day RNSes, and this sort of one day rise is certainly on the cards with the right news.

I'm inclined to the view that there probably hasn't been a leak.
And all the RNSes etc. in the public domain more than justify the current rise.

But you can never be 100% certain, and a leak doesn't have to come from the company itself.
The closer something big gets to being announced, the more parties that are likely to get to know about it in advance, and the greater the chance of leakage.
That can make it very difficult to have an idea of the source, let alone prove it, even if a leak looks likely.
Leaks of one sort or another seem to be fairly common, but you never seem to hear of anyone being held to account over it.

Ultimately though for our purposes it doesn't really matter.

And if anyone is buying in because they think there's a leak, it probably just means that they're doing the right thing for the wrong reason, as further good news and rises should be coming in any case.

"The fun is only starting once we have the news we are after the price will smash past 1.5p at this rate."

I agree that the fund should just be starting here.

Selling out now would be a 'beginner's mistake'.

In December 2020 the ZEN s.p. nearly quadrupled in one month (from 0.35p to 1.325p).

And since that rise the company has made huge progress on multiple fronts, and oil, gas, and electricity prices have been soaring.

Moreover, this transformation is being reflected in the company's financial results, and ZEN's full year results in under a week should really bring this home.

The oil price has just rebounded to over $100/barrel, which seem to be helping sector sentiment.

I don't think it was sustainable to have a weaker oil price, when the gas price has been soaring: 'substitution', e.g. increased production at oil-fired power stations rather than gas-fired power stations, will help the keep the two more in line.

The recent oil price fall was I believe being driven by speculators, who tend to be notoriously short-sighted.

Fears of recession hitting the price don't adequately take account of the supply-demand dynamics, are are also rather ironic when higher energy prices are a major reason for the recession fears.

"Goldman Sees $5 Gasoline, $130 Brent By Year End
By Julianne Geiger - Aug 11, 2022, 5:30 PM CDT
" ... As for crude oil prices, Courvalin sees Brent climbing to $130 by the end of the year. “So we think Brent goes to $130 per barrel at the end of this year to reflect this need for sustained high prices.”
“We’re still in deficit. Despite growth slowing, prices still have work to do, and that’s higher from here.” ..."
https://oilprice.com/Latest-Energy-News/World-News/Goldman-Sees-5-Gasoline-130-Brent-By-Year-End.html

Above c. 1.25p, there's no real chart resistance to c. 2p, & little to c. 3p, & even 4p.

And with a wave of good news expected in the near term, and a bullish sector backdrop, it's hard to see how 1.25p won't be broken.

20th Jul 2021 7:00 am RNS Final Results
"... Final Results for the year ended 31 March 2021.
... 18.5% increase in revenue to GBP4.05m (FY2020: GBP3.42m) ..."
https://www.lse.co.uk/rns/OTAQ/final-results-per68letf081xak.html

15th Dec 2021 7:00 am RNS Interim Results
"... Revenues for six months to 30 September 2021 of GBP1.8m (H1 FY21: GBP2.0m) ...
The Board anticipates that revenues for the full year will be broadly in line with the full year to 31 March 2021,..."
https://www.lse.co.uk/rns/OTAQ/interim-results-pjcbcd45x2fm49r.html

So at OTAQ's interim results last December, they were expecting full year revenue of about £4.05M., i.e. about the same as last year.

Whereas they actually increased by £240K.:-

27th Jul 2022 7:00 am RNS Final Results
"Final Results for 12 months to 31 March 2022
... Group revenue for the year ended 31 March 2022 increased from £4.05 million to £4.29 million ..."
https://www.lse.co.uk/rns/OTAQ/final-results-7ca0iib0e0q21p3.html

And this despite a H1 revenues dip, and a full year decline in Aquaculture revenues of £1.1M.

If non-Aquaculture revenues can continue to grow at this rate, AND Aquaculture revenues recover, then medium term profitability looks achievable.

From SwingTradeBot:-

"Technical Analysis for ZEN - Zenith Energy Ltd."

"0.9999 2.55%"

"ZEN closed up 11.43 percent on Monday, August 22, 2022, on 2.5 times normal volume. The stock crossed above its 200 day moving average, improving its long-term outlook by crossing above that critical trendline."

"ADX Long Term Intermediate Term Short Term
Strong Up Up Up"

https://lse.swingtradebot.com/equities/ZEN:LSE

From TradingView.com:-

"ZENITH ENERGY LTD"

"1.000 D GBX +0.024 (+2.55%)"

"ZEN technical analysis"

"Oscillators Summary Moving Averages"

"BUY STRONG BUY STRONG BUY"

https://www.tradingview.com/symbols/LSE-ZEN/technicals/