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With oil production around 200-300 bopd and growing, market cap for ntog seems very low of c. £4mn? comparable uk listed players with 200-300bopd oil production seem to be valued around £18mn market caps? What are we missing?
Still waiting on well flow results.
US oil and gas players listed in UK are definitely starting to gather attention especially the ones that are growing production. In addition to SOUC, could only find another US onshore microcap player - Nostra Terra oil and gas, NTOG, with Permian growth plans and seems under radar. NTOG seems to be drilling 3 more wells in Permian and with production around 200-300 bopd and growing, can be worth a look imo. Market cap for ntog is very low of c. £4mn, comparable uk listed players with 200-300bopd oil production seem to be valued around £18mn market caps? Might be worth a look? All imo
"Well 13/23c-10 was drilled down dip from the Repsol Sinopec-operated Tain discovery and encountered a sequence of Captain and Coracle sands with oil confirmed in the interval from 4,740 ft (1,445 m) to 5,252 ft (1,601 m) TVDSS.
The oil water contact is estimated to be at 5,270 ft (1,606 m) TVDSS based on pressure measurements, the same level as seen in the Blake and Liberator fields. The interval contained circa 339 ft (103 m) MD, 165 ft (50 m) TVD of sand in total, with oil in the uppermost Captain sand and in the Coracle sands at the base of the interval, and, if connected to the Tain field as i3 anticipates, represents a mapped oil column of approximately 622 ft (190 m) TVD in the Captain sand alone.
According to the company, reservoir quality is expected to be equivalent to that seen in the Tain wells, one of which (13/23b-5Z) tested at an estimated 2,750 b/d from a 5 ft (1.5 m) interval in the Captain sand. Oil samples to be recovered from the downhole sampling tool are expected to be of similar quality to the 32° API oil found in the Tain field."
There will be traders catching on now and then - but you have proper assets behind it. Just need those twtr traders you talk about and weak holders to flush out. You have £18mn(ex cash) market cap, 6 months before the drill at EOG and that too with good cash flowing oil production. I recall Delt has had a market cap of at least £32mn for close to a year before the drill bit in May. I was early with delt at 1.4p levels but if you wait for being very close to the drill bit you miss a portion of the pre drill run up rise especially with oil explorers vs gas. Being appraisal well on an oil discovery is definitely going to be a big factor. Not many juniors are drilling for oil this year. All imo dyor
Not sure the Jeffries analyst Mark Wilson is house broker linked? The same analyst also covers other UK listed E&Ps?
His comments in proactive article last week;
"Enquest Plc (AIM:ENQ), another North Sea focussed stock, has its price target upgraded to 50p from 30p as Jefferies anticipates material deleveraging from US$1.2bn to US$700mln. Wilson, meanwhile, called EnQuest’s 49% free-cash-flow yield “compelling”.
Compelling must be surely an understatement especially when no other UK oiler has that sort of FCF generation? Haven't seen yet a robust estimate for enq fcf projection for 2022 for different oil price ranges.
Interesting comments from the original Serenity discovery RNS. 60% Recovery Factor seems unheard of?
"On the basis of information recovered from the discovery well, the Company retains its pre-drill estimate of 197 mmbbls P50 STOIIP for Serenity. The Company expects the thickness of the upper Captain sands package to increase, potentially substantially, moving westward along structure, based upon a measured sand thickness of 115 ft true vertical thickness (TVT) immediately west of the Serenity accumulation in the 13/23a-7A well. The 13/23c-10 well has confirmed the strong commercial potential of the Serenity area, and reservoir model simulations demonstrate potential recovery factors above 60%."
EOG is at, where DELT was at 1.5p imo. EOGs market cap is roughly half that of DELT. Delt has had a nice run up from 1.5p towards its May spud target, while EOG might be starting it soon from a £25mn market cap level imo. EOG does reminds a bit like DELT - they have also raised £7mn for the Serenity appraisal well coming up this summer in the North Sea.
And the two are targeting different types of hydrocarbons. Delt is after gas while EOG will be going after oil. Delt is going after pure gas exploration, while EOG will be drilling oil appraisal well at the Serenity oil field with i3e. It's appraisal well so low risk and high CoS. EOG also has onshore UK oil production so good cash flows too for a £25mn market cap company. Might be worth a look imo
With a successful appraisal of Serenity, like CHARs appraisal was for their Morocco discovery, and with a focus on developing Serenity field, EOGs market cap could be well more than £100mn imo. That's over 10p, and the broker note has a 7p risked price target.
Not sure how it's a big rise? Recency bias makes us think it's a big rise but like I said earlier - 6 months ago in October '21 share price was 26p, right before the November '21 update. Since then oil has rallied $30+ while enq has not even gone up 10p, you could argue that enq has not even started getting priced in like a deleveraging play. Remember that share price was close to 30p pre covid with higher debt and much lower oil price.
With every passing day as enq debt keeps going down the sp value gets anchored higher. So if there is a oil price pullback or production disappointment after enq net debt reaches say $700mn, the pullback in sp will not be as bad as it would be when say net debt was $1.2bn.
Look at the likes of OXY,BTE, SD, CPG, DVN on USA /CA markets. They have gone up 300-500% minimum the past year to 18 months. For enq the rise has just begun imo if oil stays above $100 and it's been only a month or so since the trend has changed in sp. Forget the share price - look at the market cap and then look at the FCF generation and net debt reduction potential. As a percentage of market cap, Hbr or Tlw have nowhere close to this sort of fcf generation potential. All imo
I3e and EOG are must holds at least till the Serenity appraisal well thats coming this summer imo. That's my hope that the CEO focuses only on the acreage that we have, not go after something else that's shiny. They might be bidding still on assets especially when they have clearly mentioned in the RNS that M&A is also a potential use for the "unencumbered cash". All imo
Looks like the US natgas prices being pulled higher to align with TTF and draw down of US inventories is pushing gas prices higher in USA and Canada. And i3e has 20kboepd + of it... Could i3e be looking for more acquisitions given strong outlook for gas/oil prices and the rise in sp? The only thing bothers me about this CEO /board. They should focus only on organic opportunities especially when so much reserves are there to be drilled.
https://gofile.io/d/w4oQiv
"Management already believes Serenity contains sufficient reserves for a single well tie-back to the neighbouring Tain field, which we value at 1.7p/sh in our risked-NAV. However, successful appraisal drilling would open up a significant FPSO development opportunity, the prospects for which have been enhanced by the recent UK Energy strategy. This comes in the wake of Russia’s invasion of Ukraine and calls for a scaling up of renewables while maximising North Sea oil and gas to improve domestic security of supply and reduce the reliance on Russia. To facilitate this, the government has committed to new regulatory ‘accelerator’ schemes to reduce the time between licensing and consent for offshore projects.
To value the Serenity full field development, we have modelled a project assuming 68mmbbls of recoverable reserves, with production starting up in FY26 and delivering peak gross oil output of 25,000 bpd. We have also assumed development costs of US$10/bbl and life of field opex of US$14/bbl. This points to an additional unrisked Serenity NPV net to Europa of 7.6p/sh, although we only include 1.3p in our risked-NAV after applying a 75% geological chance of success and a 25% commercial chance of success (to account for partnering). A successful appraisal will be the start of the de-risking process for this project."
Interesting thoughts from the finncap note shared on the other bb.
hTTps://gofile.io/d/w4oQiv
"Management already believes Serenity contains sufficient reserves for a single well tie-back to the neighbouring Tain field, which we value at 1.7p/sh in our risked-NAV. However, successful appraisal drilling would open up a significant FPSO development opportunity, the prospects for which have been enhanced by the recent UK Energy strategy. This comes in the wake of Russia’s invasion of Ukraine and calls for a scaling up of renewables while maximising North Sea oil and gas to improve domestic security of supply and reduce the reliance on Russia. To facilitate this, the government has committed to new regulatory ‘accelerator’ schemes to reduce the time between licensing and consent for offshore projects.
To value the Serenity full field development, we have modelled a project assuming 68mmbbls of recoverable reserves, with production starting up in FY26 and delivering peak gross oil output of 25,000 bpd. We have also assumed development costs of US$10/bbl and life of field opex of US$14/bbl. This points to an additional unrisked Serenity NPV net to Europa of 7.6p/sh, although we only include 1.3p in our risked-NAV after applying a 75% geological chance of success and a 25% commercial chance of success (to account for partnering). A successful appraisal will be the start of the de-risking process for this project."
Jse can't be compared with i3e or EOG imo. i3e is a gas play who recently doubled reserves to over 100mmboe, with exploration and additional drilling upside. While EOG is a micro cap with oil appraisal well thats coming up in North Sea this summer, targeting 200mn oil in place prospect . EOG has net 25mn recoverable oil share which is transformational for its small market cap of £27mn.
Jse on the other hand has I think 2p reserves of around 40mn which on a market cap per barrel basis seems expensive imo.
PE is not really useful imo. It's the potential FCF generation that the market is slowly catching on.
ENQ share price was 26p, just six months ago in October. And that time oil was $20+ lower - so you could argue that the deleveraging story has not even started?
If Enq generates $400mn+ FCF around $100 oil - then we are still looking at 60-70% FCF yield? That kind of FCF yield would be lapped up like crazy by the US or Canadian investors. If you look at the way the highly leveraged oil and gas producers have performed in the past year you would need to put enq share price over 70p just to mirror those gains as of today. The likes of OXY, CVE, APA, ATH, BTE, etc. All have gone up 300%-500% the past year and a half.
What sort of FCF projections do the resident forum experts have for enq at 80-90-100 prices? Surely the FCF yield should turbo charge the deleveraging? $400mn FCF and we are looking at $700mn net debt by year end? Last year, it seems golden eagle acquisition took $250mn of the FCF else potentially would the net debt be currently close to $800mn? Any other thoughts of robust FCF estimates? Cheers
Is it likely that NNPC is interested in Exxons stake and sepl might not get it? Any views?
"The state-owned oil firm, which is the major shareholder in the Joint Ventures with ExxonMobil, may have exercised its right of first refusal on the assets as part of a new era which will focus solely on building the long term profitability of the NNPC Ltd.
In a letter signed by Group Managing Director, Mele Kyari, and addressed to ExxonMobil, the NNPC reiterated its resolve to take over the ExxonMobil’s share of the assets.
While announcing the deal earlier, ExxonMobil had said that the deals were subject to approval and the new position of the NNPC, meaning that the whole process of sale and purchase agreement between ExxonMobil and Seplat Energy may has be discontinued.
It stated, “We are aware that you reached an agreement to divest from onshore and shallow waters JVs, clearly we are interested.”
https://www.google.com/amp/s/nairametrics.com/2022/03/04/nnpc-to-meet-exxon-mobil-on-march-17-over-deal-with-seplat/%3famp=1
EOG - Europa oil and gas, might be a better North sea exploration play - they've raised £7mn for the Serenity appraisal well coming up this summer alongside i3e. Low risk 200mn barrels appraisal well in the North Sea.
Market cap is pretty low around £26mn out of which the £7mn is cash. They also have Wressle UK onshore oil production of some 200 bopd +.
Worth a look imo
EDR are the operator at Wressle so we need to wait till next week when their Interim results will be released - they should release more details about the Wressle development. A new CPR which might upgrade the reserves is a possibility alongside gas monetization options instead of flaring it especially with UK gas prices at 200p levels.
Few days ago the Serenity operator, i3e CEO confirmed the drill time table in the below interview. Good to hear his thoughts on Serenity and how big the potential is.
https://youtu.be/g_NQufrGYkw