oil monitor 300312
TRANSCRIPT
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Oil monitorOil monitorOil monitorOil monitor 30 March 201230 March 201230 March 201230 March 2012
Dr Zac PhillipsDr Zac PhillipsDr Zac PhillipsDr Zac Phillips
+44 203 463 [email protected]
NeerajNeerajNeerajNeeraj PPPPaliwalaliwalaliwalaliwal
+44 203 463 [email protected]
Alex OgbechieAlex OgbechieAlex OgbechieAlex Ogbechie
+44 203 463 [email protected]
In this editionIN THIS EDITIONIN THIS EDITIONIN THIS EDITIONIN THIS EDITION 1111DATA WATCHDATA WATCHDATA WATCHDATA WATCH 1111PUBLISHED RESEARCHPUBLISHED RESEARCHPUBLISHED RESEARCHPUBLISHED RESEARCH 2222OIL MARKETOIL MARKETOIL MARKETOIL MARKET 2222FROM THE TRADING FLOFROM THE TRADING FLOFROM THE TRADING FLOFROM THE TRADING FLOOROROROR 3333BIGGEST MOVERS 3NEWS ROUNDUPNEWS ROUNDUPNEWS ROUNDUPNEWS ROUNDUP 4444OILEX LTD (OEXLN) 4TOWER RESOURCES (TRPLN) 4MATRA PETROLEUM (MTALN) 4BOWLEVEN (BLVNLN) 5SALAMANDER ENERGY (SMDRLN) 5ITHACA ENERGY IN (IAELN) 6NAUTICAL PETROLEUM (NPELN) 6VOLGA GAS (VGASLN) 6AFREN (AFRLN) 7FAROE PETROLEUM (FPMLN) 7JKXOIL &GAS (JKXLN) 8PARKMEAD GROUP (PMGLN) 8SERICA ENERGY PLC (SQZLN) 9ENEGI OIL PLC (ENEGLN) 9STOCKS UNDER COVERAGSTOCKS UNDER COVERAGSTOCKS UNDER COVERAGSTOCKS UNDER COVERAGEEEE 11111111
Data watch
Indices
Index Close Change
FTSE All share 3,002 -39.6
O&G 8,420 -215.2
Dow 13,146 99.7
S&P 1,403 10.5
O&G 506 -6.5
EuroStoxx 263 -3.0
O&G 343 -8.4
Source:Source:Source:Source: Bloomberg & Fox-Davies
CommoditiesCommodity Close Change Chart
Crude
BFO ($/bbl)
WTI ($/bbl)
123.5
105.4
-1.9 (-1.5%)
-2.2 (-2.1%)
3 Month Performance ($/bbl)3 Month Performance ($/bbl)3 Month Performance ($/bbl)3 Month Performance ($/bbl)
Crude Futures
BFO ($/bbl)
WTI ($/bbl)
116.9
107.1
-1.2 (-1.0%)
-1.7 (-1.6%)
Forward Curve (33Forward Curve (33Forward Curve (33Forward Curve (33rdrdrdrd month)month)month)month)
Gas
Henry ($/mcf)
NBP (p/therm)
2.01
61.6
-0.17 (-7.8%)
8.5 (15.9%)
Gas price ($/mm btu)Gas price ($/mm btu)Gas price ($/mm btu)Gas price ($/mm btu)
Source:Source:Source:Source: Bloomberg & Fox-Davies
CurrencyCurrency Close Change 3 Month Performance
USD/GBP ($/) 1.601 1d 0.014
1m 0.010
3m 0.047
1.52
1.54
1.56
1.58
1.60
1.62
USD/EUR ($/) 1.335 1d 0.008
1m 0.003
3m 0.039
1.25
1.30
1.35
1.40
1.45
YEN/USD (/$) 82.2 1d -0.2
1m 1.0
3m 5.2
76
78
80
82
84
Source:Source:Source:Source: Bloomberg & Fox-Davies
90
100
110
120
130
WTI BFO
90
100110
120
130
WTI BFO
-
5
10
15
20
NBP Henry Hub
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Published Research
Oil Market
Crude oilUS crude inventories (see below) increased by record 7.1mm
bbl to 353.4mm bbl. This week build was primarily lead by
1.0mm bb/d increase (w-o-w) in crude imports to 9.3mm bbl/d.
Crude inventories are now at a seven month high and are also
in the upper limit of the average range for this time of year
Crude Inventories (m bbl)
Source:Source:Source:Source: EIA, Bloomberg & Fox-Davies
Oil Price ($/bbl)
Source:Source:Source:Source: Bloomberg & Fox-Davies data
Crude prices (above) have been falling entire week reacting to
bearish news flow from across the globe, and the WTI / BFO
spread has again widened.
WTI / BFO Spread ($/bbl)
Source:Source:Source:Source: Bloomberg & Fox-Davies data
In general, the oil markets are highly sensitive to geopolitical
events. Earlier in the week prices fell on the Italys Prime
Minister warning that Spain debt problems could reignite the
European debt crisis.
The prospect of a release of strategic oil reserves from the
United States and some European nations like UK, France alsopressured oil. US government official has confirmed that they
are considering a reserve release but no decisions had been
made. Speculation over strategic oil reserves is likely to keep
crude prices range bound.
Distillates, Gasoline & Refinery
Charge oilDistillate inventories fell by 0.7mm bbl (see below), and
continue to remain in the middle of the 5-year observed range.
Distillates Inventories (m bbl)
Source:Source:Source:Source: EIA, Bloomberg & Fox-Davies data
353,390
250
275
300
325
350
375
400
Apr Jun Aug Oct Dec Feb
50
75
100
125
150
Jul 09 Jan 10 Aug 10 Feb 11 Sep 11 Apr 12 Oct 12
WTI BFO OPEC
-35
-30
-25
-20
-15
-10
-5
0
5
Jul 09 Jan 10 Aug 10 Feb 11 Sep 11 Apr 12 Oct 12
135,866
100
120
140
160
180
Apr Jun Aug Oct Dec Feb
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Gasoline inventories declined by 3.5mm bbl partially due to
increased seasonal demand and decline in imports. However
the structural demand continues to remain week, as gasoline
supply over the last four weeks is down by 6.1% y-o-y.
Gasoline Inventories (m bbl)
223,370
175
185
195
205
215
225
235
245
Apr Jun Aug Oct Dec Feb
Source:Source:Source:Source: EIA, Bloomberg & Fox-Davies data
Refinery utilization stood at 84.5%, up 230 bps from the
previous week.
Refinery Charge (m bpd)
Source:Source:Source:Source: EIA, Bloomberg & Fox-Davies data
From the trading Floor
Biggest moversBiggest Movers
Source:
14,635
11
12
13
14
15
16
17
Apr Jun Aug Oct Dec Feb
50.0%
40.2%
32.9%
31.8%
29.5%
28.8%
28.6%
25.1%
25.0%
20.0%
-12.5%
-13.0%
-14.3%
-15.0%
-15.8%
-16.2%
-16.7%
-16.7%
-18.2%
-33.3%
-75% -50% -25% 0% 25% 50% 75%
Odin Energy Ltd
Greenvale Mining Nl
Central Petroleum Ltd
Gujarat Natural Resources
Maverick Drilling &
Meo Australia Ltd
Empire Energy Group Ltd
Ophir Energy Plc
Grand Gulf Energy Ltd
Oil Basins Ltd
Europa Oil & Gas Holdings
Blue Energy Ltd
Capital Oil Ab
Triangle Energy Global Ltd
Oil & Gas Exploration &Roxi Petroleum Plc
Syngas Ltd
Mako Energy Ltd
Globe Exploration Lp
Kairiki Energy Ltd
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News Roundup
Oilex Ltd (OEX LN)
CambayCambayCambayCambay----76H Well Operations Update76H Well Operations Update76H Well Operations Update76H Well Operations Update
3333mmmm PerformancePerformancePerformancePerformance Oilex took another step forward towards
the monetization of the block resources
as it successfully completed a work over
technique at the Cambay-76H horizontal
well in the Cambay field onshore India. In
the news:
Procurement and installation ofequipment capable of managing thehigh reservoir pressure in the Cambayfield completed.
The milling and clean out of fracturestimulation stages 8, 7, 6 and 5 havealso been successfully completed.
What the above means is that four ofthe eight fracture stimulation stageshave now been fully opened and onepartially opened.
Tubing will be installed once theremaining four stages have beencompleted and the well will then beflowed to surface.
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-
detail.html?announcementId=11156569
Last CloseLast CloseLast CloseLast Close 18.75pChange (5Change (5Change (5Change (5----day)day)day)day) -6.8%
Source:Source:Source:Source: Bloomberg, Fox-Davies &
Tower Resources (TRP LN)
Moneyed Up!Moneyed Up!Moneyed Up!Moneyed Up!
3m Performance3m Performance3m Performance3m Performance
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The announcement of a ~$32mm
financing for Tower Resources should
help restore investor confidence in a
management team that has suffered the
headwinds that exploration sometimes
brings. With Namibia now the focus, the
monies available should help the
Company to once again gain traction. Inthis news:
~$32mm Equity Financing Facility withDarwin.
Main purpose to provide fundingflexibility
This agreement is in addition to itsexisting 8mm Standby EquityDistribution Agreement ("SEDA") with
YA Global Master SPV Ltd("Yorkville").
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11156609
Last CloseLast CloseLast CloseLast Close 3p
Change (5Change (5Change (5Change (5----day)day)day)day) -4.0%
Source:Source:Source:Source: Bloomberg & Fox-Davies
Matra Petroleum (MTA LN)
Momentum BuildingMomentum BuildingMomentum BuildingMomentum Building
3m Performance3m Performance3m Performance3m Performance Matras results this week have continuedto underline the Company's progress
towards unlocking the value within these
difficult reservoirs. Attention will now
shift towards development, and the
expansion of the reserves base. This
news supports our 4p valuation and BUY
recommendation. In this weeks news:
Remedial action on A13 completedand production commenced with oilflowing naturally
A12 underperformance isolated andattributed to poor completion;
successful remedial action takenA14 well planned imminently3D seismic planned over the asset to
delineate the productive horizons
Cash or cash equivalents of 1.8million at year end
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11157901
Last CloseLast CloseLast CloseLast Close 0.9p
ChangeChangeChangeChange (5(5(5(5----day)day)day)day) 5.9%
Source:Source:Source:Source: Bloomberg & Fox-Davies
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Bowleven (BLVN LN)
A Butterfly Emerges?A Butterfly Emerges?A Butterfly Emerges?A Butterfly Emerges?
3m Performance3m Performance3m Performance3m Performance The results mark the close of a year oftransition for BowLeven as it migrates
towards the development of its
discoveries. Sapele's volumes continue
to improve, and while the all-important
commerciality is yet to be declared the
outlook remains buoyant. With the final
development scenario for Etinde
underway and a full work 2012
programme fully funded, investors are
well set for a year of intense activity.
Following these results we reinstate our
BUY recommendation with a 250p price
target. In this news:
Sapele-2 and Sapele-3 explorationwells encountered significanthydrocarbon intervals at multiplelevels, our fourth and fifth successfulwells in the Douala Bas
Sapele-2 tested high quality light oilfrom Deep Omicron interval with apeak flow rate of 2,738 boepd
Sapele-3 further extended the DeepOmicron and Epsilon fairways, with oilencountered in both intervals, 16kilometres from the original Sapele-1discovery well
Substantial upgrade of Sapele DeepOmicron in place hydrocarbonvolumes following Sapele-3 wellresults. Deep Omicron P50 STOIIP andAssociated GIIP now estimated as615mm bbls and 1.5 tcf respectively.Resource revision on-going.
Significant progress made towardsfinalising the Etinde developmentconcept, with the preferred approachbased on a hub and spokedevelopment
Jack-up rig contracted for two firmplus two optional wells on Etinde
2D seismic data set on the onshoreBomono Permit acquired in 2011 now
fully integrated into existing datasetand first exploration well locationidentified.
4C OBC 3D seismic acquired overparts of block MLHP-7. Interpretationto support appraisal/developmentactivities now ongoing.
Group cash balance $124 million at 31December 2011, no debt.
Fully funded for current explorationand appraisal programme on Etindeand Bomono
Bomono farm-out discussions on-going.
EOV disposal nearing completion.Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11156659
Last CloseLast CloseLast CloseLast Close 98p
Change (5Change (5Change (5Change (5----day)day)day)day) 11.3%
Source:Source:Source:Source: Bloomberg & Fox-Davies
Salamander Energy (SMDR LN)
Confidence BoosterConfidence BoosterConfidence BoosterConfidence Booster
3m Performance3m Performance3m Performance3m Performance
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While the news underlines how farSalamander has progressed and the
determination of its management in
refining the Company's strategy, further
work needs to be done to fully unlock
the true value of the assets. The
Company has re-aligned its portfolio to
focus on three core areas and an active
drilling campaign this year starting with
the spud of the Tutung Alpha-3 ("TA-3")
appraisal well should enhance the
Company's upward trajectory. In the
news:
2P Reserves increased by 13.6% to75.3 MMboe (2010: 66.3 MMboe), with8MMbo added from Bualuang EastTerrace discovery
Average daily production of 18,600boepd (2010: 20,300 boepd)
Matured prospect inventory in NorthKutei, independent CPR points to676mm boe of gross meanprospective resources in four high-graded prospects
Record pre-tax operating cash flow,before working capital changes,increased by 68% to $293.6 million
(2010: $174.4 million) and profit beforetax of $112.6 million (2010: loss of$113.7 million)
Year-end cash and funds balance of$85.8 million (2010: $99.2 million) andnet debt of $210.1 million (2010:$190.2 million)
Deepened interest in Kerendandevelopment, Greater Kerendan area,Indonesia, and expanded acreageposition in Greater Bualuang area
2012 average daily production rateforecast to be 12,000-13,000 boepdfollowing disposal of non-core
producing assetsBualuang Bravo Platform on schedule
for installation 3Q 2012
Ensco-53 rig mobilised fordevelopment and exploration drillingin Greater Bualuang area
Tutung Alpha-3 spudded, gasappraisal drilling ahead (the Tutungdiscovery is a gas-condensateaccumulation with a mean resourcevolume estimated at circa 60 Bcf)
Signed 12 month contract for AtwoodMako jack up rig in Greater Bualuangarea from 3Q 2012
Exploration drilling in North Kutei tocommence 4Q 2012
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11156730
LastLastLastLast CloseCloseCloseClose 219p
Change (5Change (5Change (5Change (5----day)day)day)day) -2.5%
Source:Source:Source:Source: Bloomberg & Fox-Davies
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Ithaca Energy In (IAE LN)
Assumes operatorship of Carna discoveryAssumes operatorship of Carna discoveryAssumes operatorship of Carna discoveryAssumes operatorship of Carna discovery
3m Performance3m Performance3m Performance3m Performance Ithacas confidence on the prospectivityof the Carna discovery which lies
adjacent to the producing Garrow and
Kilmar gas fields has risen. Ithaca plans
to accelerate development studies on
the field and the intention to submit
Field Development Plan for approval
before the end of 2012 is real positive
news. In this news:
Increased working interest from 16%to 32%.
Assumes operatorship in the Carnadiscovery. The effective date of the
Acquisition is January 1, 2012.
The Carna discovery was made in early2009 with net pay of 127 feet TVD wasencountered in well 43/21b-5Z.
The well tested gas at a grossstabilised rate of 8.8mmcfpd.
New ownership structure: IthacaEnergy - operator (32%), Dyas Limited(24%), Centrica (40%), EWE EnergieAG (4%).
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11156565
Last CloseLast CloseLast CloseLast Close 199p
Change (5Change (5Change (5Change (5----day)day)day)day) 6.4%
Source:Source:Source:Source: Bloomberg & Fox-Davies
Nautical Petroleum (NPE LN)
Results of GCA report on the Kraken discoveryResults of GCA report on the Kraken discoveryResults of GCA report on the Kraken discoveryResults of GCA report on the Kraken discovery
3m Performance3m Performance3m Performance3m Performance
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450Following on from the interim results on
the 19th, this week's GCA report for
Nighthawk establishes reserves from the
Kraken discovery following the results of
the recent series of flow tests (commercial
flowrates from 9/02b-5z well drilled in Q3,
2011). This news continues to support the
stock specifically, and with a positive UK
budget for operators in the North Sea, weremain optimistic fopr the continued
growth of the Company. In this news:
Independent Reserves Opinion (IRO)conducted by Gaffney, Cline &Associates Limited (GCA) on the Krakendiscovery.
GCA estimates (net) 1P at 22mm bbl, 2Pat 42mm bbl and 3P at 68mm bbl.
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11156635
Last CloseLast CloseLast CloseLast Close 320
Change (5Change (5Change (5Change (5----day)day)day)day) -2.4
Source:Source:Source:Source: Bloomberg & Fox-Davies
Volga Gas (VGAS LN)
Looking ForwardLooking ForwardLooking ForwardLooking Forward
3m Performance3m Performance3m Performance3m Performance This weeks results underline what has beena transformational year for Volga Gas, with
2011 seeing the Company enter 2012 with a
better cash flows and a growing core with
which to provide fuel for future growth. The
$10mm debt facility provides much needed
development flexibility, which should see
the Company close 2012 in a better
position than it started. With current
production up a further 16%, and an active
exploration programme, the opportunity
for further growth remains significant. In
this news:
Group average production increased93% to 2,147 barrels of oil equivalent perday (2010: 1,115 bopd) - Currentproduction of approximately 2,500boepd
Revenues increased 118% to $28.6million (2010 $13.1 million).
EBITDA up 256% to $8.9 million (2010$2.6 million).
Net loss of $1.1 million (2010: net loss of$16.9 million).
Operating cash flow before workingcapital of $7.6 million (2010 $5.5 million),after offsetting $3.1 million of gas salesfor loan repayments (2010: nil).
10.1million in cash at 31 December 2011($26.6 million at 31 December 2010).
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11157937
Last CloseLast CloseLast CloseLast Close 102
CCCChange (5hange (5hange (5hange (5----day)day)day)day) 1.7
Source:Source:Source:Source: Bloomberg & Fox-Davies
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Afren (AFR LN)
2011 results underline progress2011 results underline progress2011 results underline progress2011 results underline progress
3m Performance3m Performance3m Performance3m Performance
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2011 has been a transitional year forAfren, and it now has a portfolio which
offers balance between exploration and
production activities spread across
geographies. It has lined up a high
impact exploration programme which
ensures that the potential for the
medium-long term remains very strong.
In 2011, the Company commenced oil
production from Ebok field - a significant
milestone. Further it also expanded its
global presence through a series of asset
acquisitions in Nigeria, East Africa and
the Kurdistan region of Iraq. In this news:
Net working interest 2P reservesincreased by 132% to 185 mmboe.
Net 2P/2C reserves and resourcesincreased by 633% to 995 mmboe
Cash at bank $292 mmRevenues were up 87% y-o-y to
$597mm led by a 34% increase inhydrocarbon production (19.1 mboed)and 37%/54% rise in oil/gas pricerealizations.
Net profit almost doubled to $125mmwith cash flow from operations
recording 62% growth to $338mm.Group firmly on track for 2012
production of 42-46 mboed.
Net debt at $548 mm (Gearing 45%)Currently participating in high impact
wells offshore Ghana and onshoreKurdistan region of Iraq.
First phase of Okoro East to be fasttracked to H2 2012.
Entry into the Kurdistan region of Iraqthrough acquisition of a 60%participating interest in the Barda RashPSC and a 20% participating interest inthe Ain Sifni PSC.
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11157965
Last CloseLast CloseLast CloseLast Close 130p
Change (5Change (5Change (5Change (5----day)day)day)day) 5.3%
Source:Source:Source:Source: Bloomberg & Fox-Davies
Faroe Petroleum (FPM LN)
Flush with Success, the trick is to continueFlush with Success, the trick is to continueFlush with Success, the trick is to continueFlush with Success, the trick is to continue
3m Performance3m Performance3m Performance3m Performance It seems to be that 2011 has been a yearin which a number of companies have
made the transition to Producer from
Explorer, which is good for the sector;
Faroe is now one of them. This balance
has been brought about by monetisation
of Maria discovery through swap deal, to
discoveries on Butch in Norway and its
first UK operated well - Fulla. We believe
that while 2011 has been a
transformational year, the momentum
needs to be carried into 2012, and with a
capex budget of up to 180mm, we
expect this to be the case. In this news:
Fivefold increase in 2P reserves to23.8mm boe
Capex of up to 180mm - 100mm onexploration and up to 80mm ondevelopments
Average production of approximately2,500boepd (economic productionaveraged approximately 10,100boepd)
Turnover increased more than five-foldto 80.2m (2010: 15.1m)
EBITDA increased significantly to40.9m (2010: 6.0m)
Profit before tax, increased to 14.3m(2010: 26.0m loss)Secured $250m (approximately 156m)
reserve based lending facility.
Cash of 111.6m (31 December 2010:132.2m)
Award of 7 new licences (3 operated)in Norway 2011 APA Round.
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11157934
Last CloseLast CloseLast CloseLast Close 166p
Change (5Change (5Change (5Change (5----day)day)day)day) 9.0%
Source:Source:Source:Source: Bloomberg & Fox-Davies
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JKX Oil & Gas (JKX LN)
Baseline established, rebuilding starts hereBaseline established, rebuilding starts hereBaseline established, rebuilding starts hereBaseline established, rebuilding starts here
3m Performance3m Performance3m Performance3m Performance There is plenty for the Bulls and theBears to read in JKXs statement as the
higher revenues and drilling successes
mask what is declining cash flows and
lower production, and as always, for us,
cash is king. LPG will make a full
contribution in 2012, Russian gas
should come on stream in 2012 and
the recent decline in operational
performance appears to have been
arrested. Nevertheless, we believe that
the optimistic outlook will take time for
the market to believe and any resultant
weakness in these shares following theresults is an opportunity, we believe, to
pick up the stock as 2012 should be a
year of better performance and
improving outlook. In this news:
Production down 12% to 9,045boepd (2010: 10,324 boepd);
Operating profit down 14% to$82.1mm (2010: $95mm beforeexceptional items)
Revenue up 23% to a record$236.9mm
LPG project in Ukraine completedmid-year;
Completion of the Koshekhablskoyegas field facility in Russia
Phase II Koshekhablskoyedevelopment planned to doubleproduction from booked reserves;
Drilling of two successful Ukrainianexploration wells in theMolchanovskoye "Wedge Zone"andthe Zaplavskoye exploration licence;booked reserves grew to90.7MMboe, with a reservesreplacement of 2.7.
Full news story here:
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11159290
Last CloseLast CloseLast CloseLast Close 161p
Change (5Change (5Change (5Change (5----day)day)day)day) -11.0%
Source:Source:Source:Source: Bloomberg & Fox-Davies
Parkmead Group (PMG LN)
The End of the BeginningThe End of the BeginningThe End of the BeginningThe End of the Beginning
3m Performance3m Performance3m Performance3m Performance These results mark the end of theCompany's journey from investment
vehicle to junior E&P. these results are
not about the reserve base, which is
small, or the income, which is negligible
(this year), but about the fact that the
with ~$13mm in the bank, and the 2012
appraisal and development programme
funded, all the ingredients for near-term
growth are now in place.
Fully funded for its 2012 programme ofappraisal and drilling
First UK North Sea acquisitioncompleted in November 2011(Platypus and Possum)
Near term appraisal drillingSecond North Sea deal agreed in
December 2011 (Pharos) gas prospect
In addition to 4 UKCS gas basin blocksThird oil and gas deal agreed in March
2012 - acquisition of a portfolio ofNetherlands onshore assets
Four producing gas fields and two oilfields
First production for ParkmeadThe full news story here:
http://images.headland.co.uk/mmct2url.asp?ml=foxda
vies&ea=fox-davies@fox-
davies.com&cc=FOXDAVIES2826&url=http://www.lon
donstockexchange.com/exchange/news/market-
news/market-news-
detail.html?announcementId=11162042
Last CloseLast CloseLast CloseLast Close 20p
Change (5Change (5Change (5Change (5----day)day)day)day) -1.3%
Source:Source:Source:Source: Bloomberg & Fox-Davies
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Serica Energy Pl (SQZ LN)
On to the next phaseOn to the next phaseOn to the next phaseOn to the next phase. Equity Funding on the. Equity Funding on the. Equity Funding on the. Equity Funding on the
Agenda?Agenda?Agenda?Agenda?3m Performance3m Performance3m Performance3m Performance 2011 has seen Serica complete its
migration away from Asia, towards the UCS
and Atlantic margin, and the near-term
development of Columbus will herald the
start of the new phase of growth. While
past costs will be refunded by BP's farm in
to its Namibian acreage, we believe that
the scope for dramatic improvements in
free cash flow are limited (cost cutting will
have an impact at the margins), its yearend
cash balance of $20mm in the context of its
and its indicated programme of
exploration, appraisal and development,means that the likelihood of an equity
financing is likely as a means to supplement
debt and other contractual financing
arrangements in meeting the funding gap.
Promising 2011 fiscal performance:o Revenue of $27.1mmo Cash from operations $7.5mmo Cash position of US$20 milliono No debt
Columbus field development in 2012:o Negotiations concluded with BG for
export via Lomond platform,
subject to final documentation,partner and Board approvals
o All engineering and design studiescompleted
o NSAI estimate 11.2mm boe grossreserves in Block 23/16f
Wells planned for Doyle and South Ottersubject to farm out
Two further UK licences awarded at yearend
85% Namibia's interest in central LuderitzBasin blocks (offshore)
o Large structures identifiedo Secured farm-out with BP.o BP will carry full cost of 3D seismicsurvey and past costs (earns 30%)
Six new blocks awarded in Irish RockallBasin, Serica operator
o Three large prospects mapped:Muckish, Midleton, West Midleton
o Farm-out campaigns commencedfor licences in the Slyne and RockallBasins
Farm-out underway prior to drilling firstwell in Morocco
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11162084
Last CloseLast CloseLast CloseLast Close 37
Change (5Change (5Change (5Change (5----day)day)day)day) -2.0
Source:Source:Source:Source: Bloomberg & Fox-Davies
Enegi Oil Plc (ENEG LN)
2011 results shows steady expansion2011 results shows steady expansion2011 results shows steady expansion2011 results shows steady expansion
3m Performance3m Performance3m Performance3m Performance
0
5
10
15
20
25
2011 has been a good year for theCompany, as it now has a portfolio which
offers balance between near term and long
term drilling activities spread across its
operating regions (Tanzania and Canada).
In addition to these areas, and in keeping
with the Company's desire for a diverse
portfolio of direct and indirect interests a
range of assets at throughout the spectrum
of the development cycle, the Company is
also looking at further investment in East
Africa as well as North and South America.
With this approach, and the existing asset
base, we believe that the Company is wellplaced to grow in 2012. While there is no
doubting the portfolio's potential, we
believe that further resources will be
required for the Company to unlock and
test this potential. In this news:
Solo strategically increased its holdingsin the Ruvuma PSA in Tanzania from12.5% to 18.75% in the period and to25% subsequently
The Ntorya-1 well (Mtwara block Tanzania), spudded 22 December 2011,currently at 2,600m.
Loan with Reef Resources converted to aworking interest in Reef's Ontarioproperties,.
A General Conveyance and AssignmentAgreement was completed in July 2011and Solo obtained a 23.8% workinginterest for the conversion of its existingloan and additional payments.
Solo also obtained the option to acquirea further 14.3% for a further paymentonce Reef had raised at least that level ofindependent third party finance.
In December 2011 Reef completed aCDN$1.96 million financing.Subsequently, Solo is currentlycompleting arrangements to take up theadditional percentage interest andexpects to complete that transaction inthe 2nd quarter 2012.
The Company also commencedevaluation of a new explorationopportunity in Argentina under a Headsof Agreement with Obtala Resources Ltd
Post period, a new exploration well;Airport North #1 was spudded inCanada. The well should be completedin early April.
Full news story here:http://www.londonstockexchange.com/exchange/news/m
arket-news/market-news-detail.html?announcementId=11162084
Last CloseLast CloseLast CloseLast Close 16
Change (5Change (5Change (5Change (5----day)day)day)day) 10.2
Source:Source:Source:Source: Bloomberg & Fox-Davies
10
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40
50
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Oil Monitor Page | 10
Enegi Oil Plc (ENEG LN)
Building on opportunitiesBuilding on opportunitiesBuilding on opportunitiesBuilding on opportunities
3m Performance3m Performance3m Performance3m Performance
0
5
10
15
20
25
Today's results mark the close of a yearof transition for Enegi, and progress can
finally be made on unlocking the value
within its assets. In addition to building a
portfolio of opportunities which offer
potential for the Company to grow from
alternate revenue streams number of
sources, most notably the strategic
partnership with Advanced Buoy
Technology, there is also the Company'sLast CloseLast CloseLast CloseLast Close 16p
Change (5Change (5Change (5Change (5----day)day)day)day) 10.2% more conventional development
portfolio. We believe that with ~$550m
in cash, an ambitious future
development programme and limited
revenue generation, in the near-term,there will need to be either a scaling
back of the development programme, or
a combination of farmouts and / or
disposals, or as is more likely, a financing
to accelerate the opening up of the asset
base. In the news:
Nearing completion of the workoveron the PAP#1 well
o Data suggests well could beflowed continuously
Potential for Shale play across assets(Green Point)
Agreement with Advanced BuoyTechnology
o Applying for licenses in the UKNorth Sea under the 27thSeaward Licensing round
o Targeting marginal / strandedgas reserves
Executing early stage prospectingprogramme (County Clare, Ireland)
Strengthened management team andBoard
o Technical and financialcredentials bolstered
Full news story here:http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11162038
Source:Source:Source:Source: Bloomberg & Fox-Davies
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Oil Monitor Page | 11
Stocks under coverage
Company Ticker Recommendation DatePrice
Latest Target Difference
Aminex AEX LN UR Nov'11 5p 13p 160%
Borders & Southern BOR LN BUY Nov'10 67p 150p 124%
Bowleven BLVN LN Buy Nov'11 98p 250p 155%
Circle Oil COP LN BUY Feb'12 21p 95p 352%
Desire Petroleum DES LN UR Mar'11 29p 40p 38%
Enegi Oil ENEG LN UR Nov'10 16p 25p 56%
Falklands Oil & Gas FOGL LN BUY Apr'11 63p 250p 297%
Great Eastern Energy GEEC LN BUY Mar'12 328p 440p 34%
GulfKeystone GKP LN BUY Mar'12 262p 320p 22%
Gulfsands GPX LN UR Jan'11 150p 350p 133%Hardy Oil & Gas HDY LN BUY Aug'11 158p 250p 58%
Heritage Oil HOIL LN BUY Mar'11 143p 310p 117%
Jubilant Energy JUB LN Buy Mar'12 31p 55p 77%
Matra Petroleum MTA LN BUY Jan'12 1p 4p 290%
Max Petroleum MXP LN BUY Mar'11 13p 50p 285%
MEO Australia MEO AU BUY Feb'12 A$0.34 A$0.60 76%
Range Resources RRL LN BUY Mar'12 13p 27p 108%
Red Emperor RMP LN BUY Mar'12 42p 65p 55%
Rockhopper RKH LN BUY Nov'11 328p 600p 83%
San Leon Energy SLE LN BUY Feb'12 10p 60p 500%
Sterling Energy SEY LN HOLD Jul'11 39p 30p (23%)
Tower Resources TRP LN HOLD Jul'10 3p 4p 33%Victoria Oil & Gas VOG LN BUY Feb'12 4p 13p 225%
Source:Source:Source:Source: Bloomberg & Fox-Davies
NOTE:NOTE:NOTE:NOTE: Bold indicates Research this week
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