Malcy’s Blog – Hurricane, Amerisur, Coro, DGO, IGas

Hurricane Energy

Hurricane has announced the results of the Lincoln Crestal well which show a maximum stable flow rate of 9,800 stb/d on Esp’s of 43 API oil and with no water. It produced 4,682 b/d under natural conditions and will be suspended as a producer with L/T gauges to test interference with other GWA wells.

This is another excellent result for Hurricane, it is another commercial discovery and will be tied back to the Aoka Mizu. This is the second well in a three-well programme on the GWA and the rig will now move to drill Warwick West.

Amerisur Resources

Amerisur has reported interims this morning and whilst they don’t tell us much that we don’t already know the title, ‘steady production growth and strong operating cash generation tell us as much as we need to know.

Production was 5,552 bopd in the half at $58.80/bbl but current production is 6,900 bopd and of course, they are now carrying third party crude through the OBA. This means that the company should ‘reach or exceed’ the top end of its 5-6/- guidance which is another strong point. EBITDA of $19.2m is good with an increase in net cash of $18.5m giving ‘robust’ net cash of $46m.

These very strong numbers will give the board the best possible negotiating stance when it meets potential suitors in Bogotá shortly. The strategic review continues with many expressions of interest but with these numbers and exploration success, any sale of all or part of the business would have to add up to way more than the current price.

Coro Energy

Interims from Coro this morning but key points in the announcement are to do with executing SE Asia growth strategy where projects with existing discovered resource and exploration upside are being targeted. Key here is the exciting Duyung PSC which contains the Mako gas field offshore West Natuna in Indonesia where upcoming drilling could give very substantial upside.

Since the period end the company has also restructured the cash consideration payable for the Bulu PSC which contains the Lengo gas field offshore East Java much to the company’s advantage. Coro is strongly financed, has one of the best managements in the sector and the ability to take advantage of the many opportunities in the fast-growing Asian market. Accordingly, the recent strengthening of the share price could easily go a good deal higher.

Diversified Gas & Oil

A number of housekeeping items from DGO this morning but of genuine significance. First, the company is formally pursuing a move to the Premium Segment of the Main Market of the LSE. This should complete with the final results due in Q1 2020 and shows just how far the company has come since admission to Aim early in 2017.

Tied in with this move the company announces a change of auditors in keeping with the growth of the company and the need for a ‘big four’ firm. Along with this the company are beefing up th3 corporate governance procedures to include board independence and composition ‘ and the effective roll-out of its upgraded ESG programme.

IGas Energy

Figures from IGas this morning were good with the performance from existing producing assets up to best expectations and the company continues to generate strong operating cash flow.

Perhaps more important has been the results coming from Springs Road in North Nottinghamshire where the company has proved up a ‘world-class resource’ from which the company can ‘attain significant gas flow from this basin’.

Finally, the company reminds us that domestically produced onshore gas goes a long way to meet net-zero emissions targets and it is IGas who should be in the driving seat when this is established.


By Malcolm Graham-Wood

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