Malcy’s Blog – Hurricane, RockRose, Aminex, Solo, Serica

Hurricane Energy has announced that it has spudded the Warwick West well, the 3rd well in the 2019 drilling programme with Spirit Energy.

RockRose Energy

RockRose has announced interims to June which given the plethora of news recently is almost entirely already in the market following the return from suspension after completion of the Marathon acquisition. But the best news for shareholders will be the interim dividend of 60p per share with an anticipated final of 25p.

Proforma production of 22.1 kboed with 2P and 2C as at 31st March 2019 is 87.6 MMboe and total cash at 31st August of $367.9m of which is included $86.4m of restricted cash. EBITDA for the 1st 6 months was $51.6m with capex of $25.6m. Successful integration of Marathon, drilling at West Brae and Blake is upcoming and progress on Tain and Arran is on budget and and schedule. Some 2H production will see fall-off but this is to be expected and designed to benefit the longer term

The bottom line is RockRose is still trading at cash whilst generating over $200m per annum, still investing in the exciting asset portfolio and is committed to dividend discipline. While continuing to convert 2C to 2P  my target price of 3750p remains firmly in place, what’s not to like?

Aminex

Excellent news for Aminex this morning who tell the market that all conditions precedent within the control of Aminex and ARA have been satisfied and the companies have seen signs of the Government ‘actively’ resolving several long-standing issues with other operators in-country. Even better news for Aminex is that ARA have agreed to bring forward the $3m advance in installments ahead of completion of the farm-out which provides much needed flexibility to Aminex. The second tranche of $2m, initially due 180 days after the completion will now be paid on completion.

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Aminex and ARA have had a number of meetings with the Tanzanian Government recently and they are reasonably confident that farm-out consent and payment might come quite soon. It has also been noted recently that neighbouring country Governments have been reaching out to Tanzania looking for the supply of gas which has been an important part of Tanzania’s state of mind.

I conclude that it would be unlikely to see ARA putting $3m into the pot if they didnt have the confidence that this deal is at long last about to get done, accordingly I am starting to get genuinely excited that the long wait by Aminex shareholders might just be coming to its end with the next stage of the process looming.

Solo Oil

As a modest footnote it should be worth noting that there is a positive read through for Solo in this process although they are clearly gearing up the rest of their business to minimise Tanzania although it would be a big plus.

Serica

Results also for Serica today and i will write up in more detail after I have returned from holiday and chatted with Mitch Flegg. Meanwhile 1H 2019 has ‘demonstrated the financial benefits of the transactions completed at the end of last year’ and the company has significantly increased production and significantly reduced operating costs resulting in a £16.80 per boe operating margins. Serica has one of the strongest balance sheets in the market and remains a very strong candidate in the top tier of the sector. Rhum depends on US approval at expiry end October whilst BKR are all maintaining good production, I shall write up more as I said in due course.

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By Malcolm Graham-Wood

Source Link www.malcysblog.com/2019/09/hurricane-rockrose-aminex-solo-serica

Website Link www.malcysblog.com

 


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