SP Angel – Oil & Gas View – Tuesday 2nd July 2019 (LON: JKX, UJO, IGAS & RBD)

Oil price stable as cutbacks extended

 

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  • JKX Oil & Gas (JKX): Drilling Result
  • i3 Energy (I3E):
  • Independent Oil & Gas (IOG): Operational Update
  • Reabold Resources (RBD): Equity Raise

 

Oil price:

  • Crude prices stable as OPEC/Russia confirms extension of cutbacks, will continue with a reduction of 1.2 million bopd for an additional six to nine months

 

Energy prices:           

Oil US$65.2/bbl vs US$66.7/bbl yesterday

Natural Gas US$2.288/mmbtu vs US$2.310/mmbtu yesterday

        

Company News

JKX Oil & Gas (JKX): Drilling Result

  • Long-running Well 5 Sidetrack on the Koshekhablskoye gas field in Russia has been completed and is currently producing over 1,000 boepd
  • Rig has relocated to Well 18 which will be the second of three consecutive workovers on the field

Conclusion: Looks like a good flow rate from Well 5, about time as the well-encountered problems

Union Jack Oil (UJO)*: Oversubscribed Placing

  • Union Jack Oil has completed an oversubscribed placing to raise £2.25 million at 0.17 pence per share, a small premium to yesterday’s closing price
  • The cash will be usedto fund an extended well test (EWT) on the recently announced successful West Newton-2 appraisal well in which UJO is earning a 16.7% interest by paying 25% of the cost of the well and testing
  • The EWT in Q3-2019 will be expanded to test the liquid and/or gas intervals evident in the well, which the company believes could be transformational for Union Jack and its shareholders

Conclusion: A sensible raise given the recent success with the West Newton-2 appraisal well, with a positive result from the planned EWT being a potential game-changer for the company

*SP Angel acts as Nomad and Broker to Union Jack Oil

 

 

Igas (IGAS): Ellesmere Port Appeal

  • Ellesmere Port appeal which was to be determined by a Government appointed Planning Inspector is now going to be decided by the Secretary of State
  • Intervention due to the potential development of UK onshore shale gas being of major importance having more than local significance
  • Appeal goes back to January 2018 when Cheshire West and Chester council’s Planning and Licensing Committee refused planning consent for routine tests on the Ellesmere Port-1 well

Conclusion: Potentially good news for Igas as the importance of long term shale gas development in the UK is under scrutiny

 

Reabold Resources (RBD): Equity Raise

  • Reabold has raised £2.65 million at 1.1p/share, in line with yesterday’s closing price (and at a premium to the 90-day VWAP)
  • Cash will be used for further strategic investment into its current portfolio and potentially new investments

Conclusion: Makes sense for Reabold to raise cash now, company has a 24% economic interest in the recently successful West Newton onshore UK gas appraisal well and shares are up 60% year to date

 

Oil & Gas Consultant:

Finlay Thomson

Analysts

John Meyer – 020 3470 0490

Simon Beardsmore – 020 3470 0484

Sergey Raevskiy – 020 3470 0474

James Mills – 020 3470 0496

 

Sales

Richard Parlons – 020 3470 0472

Jonathan Williams – 020 3470 0471

Abigail Wayne – 020 3470 0534

Rob Rees – 020 3470 0535  

 

SP Angel                                                            

Prince Frederick House

35-39 Maddox Street London

W1S 2PP

 

*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded) and No3 in oil & gas nomad clients.

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

 

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