Malcy’s Blog – Oil price, Coro Energy, Afentra & finally

WTI $66.21 +14c, Brent $68.87 +22c, Diff -$2.66 +8c, NG $2.98 +7c, UKNG 64.0p – 3.0p

By Malcolm Graham-Wood

Oil price

Given the nature of the EIA stats the resulting oil price move was monumentally uninspiring. The numbers themselves were pretty good, the 1.7m barrel draw in crude was good and accompanied by a 1m reduction at Cushing so a modest round of applause might have been expected.

At the product level in my mind the figures were even better, with a refinery rate of 87%, up slightly gasoline drew 1.7m  b’s and distillates 3m. Gasoline production was 9.1m b/d up 30%y/y and distillates were 4.1m, up 20% and with jet fuel up 110% reflecting comments here and elsewhere about strong passenger numbers credit was not given. That led to total products of over 20m b/d which whilst not totally surprising given it is the week before the Memorial Day weekend shows quite how strongly the US market is already growing.

Finally it is worth noting that at Exxon, Shell and Chevron a combination of investor revolt and legal challenges will force boards to change, probably modestly, their plans which of course will only serve to reduce supply and drive up prices…

Coro Energy

Coro has announced that it has entered into a conditional Sale and Purchase Agreement with Dubai Energy Partners, Inc to dispose of the Company’s Italian portfolio for a cash consideration of €300,000.

DEPI is incorporated in the United States of America and is focused on the acquisition of producing, and shut-in, oil and gas fields. It will acquire the Company’s entire interest in the Italian Portfolio, through the acquisition by DEPI of the entire issued share capital of the Company’s wholly owned subsidiary Coro Europe Limited for a cash consideration of €300,000, with a deposit of €30,000 payable on entry of the SPA (non-refundable except in limited circumstances).

The economic effective date for the Disposal is 26 May 2021, being the date of signing the SPA. DEPI will be entitled to any profits, and responsible for any losses, from the Italian Portfolio from this date. Completion of the Disposal is conditional on, inter alia, approval by the Italian Ministry of Economic Development, with DEPI assuming responsibility for any operational losses for the Italian Portfolio from signature of the SPA until completion.

Coro say that the proceeds of the Disposal will be applied towards the Group’s energy transition strategy in South East Asia.

Mark Hood, Chief Executive Officer, commented:

“We are pleased to agree a sale of our non-core Italian assets to DEPI, who are ideally placed to take the portfolio forward. The disposal allows us to prioritise our time and resources on our low carbon and renewable energy strategy in South East Asia, which continues to gain momentum. We look forward to updating shareholders in due course.”

Disposal of the Italian portfolio has been the plan for Coro for nearly two years with a desire to focus on the company’s SE Asia assets where it is confident that it can generate higher returns. After a decent run the shares have drifted back which I don’t feel is deserved. Having spoken recently with Mark Hood for the first time I’m sure he will do as he has promised and succeed with the far east policy.

Afentra

Afentra has a ‘refreshed strategy built around achieving scale through the acquisition of both operated production assets and discovered resources resulting from the accelerating energy transition in Africa, where the Company and its new management has extensive operational experience’. The Company currently has the high potential onshore Odewayne exploration block that is operated by Genel Energy, where its 34% interest is fully carried.

Historic results are rarely much use especially when looking at Afentra so the post year end comments today are worth remembering. On 18 February 2021 several institutional and high net worth investors purchased the shares sold by Waterford Finance and Investment Limited (equating to its entire 29.23% shareholding in the Company) and Mistyvale Limited (equating to its entire 15.66% shareholding in the Company).

In March 2021: Paul McDade and Ian Cloke join the Board of Directors as CEO and COO respectively followed by Jeffrey MacDonald and Gavin Wilson who join as Independent non-executive Chairman and Independent non-executive Director respectively.

In April 2021 the Company announced its intention to change its name from Sterling Energy plc to Afentra plc and adopt new articles of association. The proposed changes were approved at the General Meeting held on 30 April 2021. On 5 May 2021 Afentra launched and Anastasia Deulina was appointed as Chief Financial Officer.

Commenting, CEO Paul McDade, said:

“The last few months have been truly transformational for the Company. I speak for the whole management & Board as I express our excitement as we embark upon our updated strategy targeting scale through the implementation of a buy and build model, focused on the energy transition in Africa. In parallel to our updated strategy we continue to work with our partners in Somaliland to establish additional shareholder value from this existing early stage asset”. “I must also thank the Sterling Energy team who despite an extremely challenging year have shown resilience and have, like our shareholders, welcomed the new members to the team. We look forward to 2021 and progressing our strategy as the new Afentra team.”

I am looking forward to seeing what the new management of Afentra are going to do, it is a dynamic board at executive and non-exec level and clearly have a positive agenda in Africa. Strongly financed with the ability to gear up if necessary this could be a stock to own as the shake-up in the sector continues.

And finally…

Last night’s Boropa Cup final was as expected as the Red Devils yet again failed at either semi-final or final stage of pretty much anything they have entered since Ole was appointed. Losing 21-20 on pens sounds like fun but poor defending and with Rashford and Cavani profligate in front of goal this was a shambles. Big question is whether or not the manager gets to stay as there are several top coaches around and if the cheque book is open in the summer…

(The opinions expressed here are those of the author, a columnist for Share Talk.)

Malcolm Graham-Wood

Source Link https://www.malcysblog.com/2021/05/oil-price-coro-afentra-and-finally/

Website Link www.malcysblog.com

Disclaimer: Malcy’s Blog is provided for general information about the international oil and gas industry and the companies that operate within it. It does not constitute investment advice and Malcy does not buy or sell shares, warrants or bonds in any company written about within the blog. Information is taken from publicly available sources and any comment is that of the author who does not take any third party comment in the blog


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