Hybridan Small Cap Feast - 27 September 2024

27th September 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour Dish of the day Admissions: None Delistings: None Whats baking in the oven? Potential**** Initial Public Offerings: ITF announced: GenIP aims to list on the AIM market on 2 October 2024. It is targeting to raise £1.5m and anticipating a £6.5m market cap. GenIP is a portfolio...

AUCTUS ON FRIDAY - 27/09/2024

AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN/CN)C; Target price £0.70 per share: Another horizontal well with high flow rate – The fourth horizontal well at Carrizales Notre (CNB HZ-5) has been put on production at a gross oil rate of 2.7 mbbl/d (1.35 mbbl/d net to Arrow) with a water cut of 11%. This flow rate compares favourably with CNB HZ-4 that was put on production at a gross oil rate of >2.5 mbbl/d (8% water cut). Overall gross oil production fro...

Zephyr Energy Plc (AIM: ZPHR): Decision on next steps in the Paradox i...

• • 1H24 sales volumes in the Williston were 1,239 boe/d. • The FY24 production guidance for the Williston is unchanged at 1.1-1.3 mboe/d. This excludes >100 boe/d of natural gas liquids. • While the cash position at the end of June 2024 was ~US$1.1 mm, the receivables were US$11.5 mm (with payables of only US$7.6 mm). The overall cash plus receivables minus payables of ~US$5 mm is well above our expectations of US$0.2 mm. This reflects the expected imminent payments of US$3.9 mm (US$3 mm from t...

OKEA (Buy, TP: NOK28.00) - Recovery in motion

In our view, the accretive Yme divestment will be key for OKEA’s turnaround story to unfold. Following a dividend halt and sharp negative re-pricing throughout 2024, we believe this transaction marks the trough, and that a likely dividend announcement in Q4 should set the stage for a recovery and narrowed NAV discount. We expect DPS of NOK3 from 2025, implying a ~15% dividend yield. We have upgraded OKEA to BUY (HOLD) and raised our target price to NOK28 (23) on a lower discount to NAV.

Caspian Sunrise (CASP LN) - Solid 1H

Caspian Sunrise delivered, we believe, solid 1H operational and financial results. Solid: Caspian results were broadly in line with our forecasts. Revenues of $18.5m (generating a gross margin of 43%) were comprised of oil sales ($10.5m; generating gross profit margin of 70%), oil trading ($5.9m, generating a gross profit margin of 29%), drilling services ($2.3m, generating meaningless gross profit margin due to the front-end loading of expenses for offshore drilling). Operationally, we have r...

Crude Quarterly Q3'24: Lower oil price

Oil inventory draws for the rest of 2024. IEA is wrong – peak demand is not imminent. Both E&P and oil service shares look highly attractive.

A potential game changer - up to BUY

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Criterium Energy Ltd (TSX-V: CEQ): High production in September. The d...

• Current production has reached 950 bbl/d, representing an increase of 90 bbl/d since August. This reflects the very good performance of the work-over programme with 98 bbl/d incremental production from three new workovers in Tranche 3 from early August. • Overall, the programme (three tranches with a total of 11 work-overs so far) has delivered 227 bbl/d of incremental production. • In addition, the work-over of MGH-48 has encountered gas, which will be used as feed gas to reduce the consumpti...

Arrow Exploration (AXL LN) - Further successful CN horizontal well

Arrow has announced a further successful horizontal well on its Carrizales Norte field, adding to company production and continuing to prove up the attractiveness of the Ubaque reservoir at Carrizales Norte and the application of horizontal wells to this.

Arrow Exploration Corp. (AIM: AXL): Another horizontal well with high ...

• The fourth horizontal well at Carrizales Notre (CNB HZ-5) has been put on production at a gross oil rate of 2.7 mbbl/d (1.35 mbbl/d net to Arrow) with a water cut of 11%. • This flow rate compares favourably with CNB HZ-4 that was put on production at a gross oil rate of >2.5 mbbl/d (8% water cut). • Overall gross oil production from the three other horizontal wells is ~5.62 mbbl/d (~2.8 mbbl/d net to Arrow) including 2.1 mbbl/d for CNB HZ-4, 1.9 mbbl/d for CNB HZ-3 and 1.6 mbbl/d for CNB HZ...

Mixed risk for dividend cuts

Following the recent sharp oil price drop to ~USD70/bbl, we see increased investor concerns about the robustness of shareholder distributions. Historically, disappointments related to dividends and/or buybacks have triggered meaningful negative share-price reactions. For our large-cap NCS coverage, we believe oil prices would have to move below USD60/bbl for any negative surprises to unfold for Aker BP and Equinor, as both have strong balance sheets, enabling dividend flexibility. On the other h...

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Weekly news, topics & discussion

This week, we published an update on DNO, seeing significant value potential from its Norwegian portfolio. As one of the most successful NCS exploration companies in recent years, the company has discovered net resources of ~135mmboe. In other news, we upgraded Aker BP to BUY (HOLD), viewing its recent underperformance as an attractive entry point. Also, a gas market update with Equinor left us slightly more bullish with regards to the near- and long-term gas market outlook.

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Weekly news, topics & discussion

This week, the Aker BP-operated Tyrving field commenced production ahead of the planned start-up in October. In other news, Vår Energi completed the divestment in the Norne area to DNO; adjusting for cash flow between the effective transaction date on 1 January and close on 30 August, DNO paid a net cash consideration of ~USD24m. Also, BlueNord reported August preliminary production of 27.0kboed. Adjusting for the Harald fiel

Hybridan Small Cap Feast - 6 September 2024

6th September 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced, or it is a rumour Dish of the day Admissions: None Delistings: None What’s baking in the oven? Our daily digest of news from UK Small Caps If you would like to unsubscribe, please email with “unsubscribe me”. Hybridan Chefs Banquet Buffet*** Camellia 4250p £117.4m (CAM.L) The UK based hold...

Zephyr Energy Plc (AIM: ZPHR): Acidization results in high flow rate a...

• Following a successful acidization job, Well State 36-2R has been tested at peak rates of >2,100 boe/d, including up to 510 bbl/d of condensate/light oil and almost no water. This excludes potential natural gas liquids production that would result in an even higher rate. • This flow rate compares very positively with the peak rate of 1,350 boe/d achieved during the first test (announced in July). The pressure response during the second test is also much better than during the previous test. T...

Criterium Energy Ltd (TSX-V: CEQ): Debt agreement frees up US$1.5 mm. ...

• 2Q24 production was 812 bbl/d. Criterium held ~C$6 mm in cash at the end of June. These figures are in line with our expectations. • 2Q24 operating costs per bbl have been reduced by 7% compared to 1Q24. With the MGH-40 & MGH-43 wells scheduled to spud imminently and expected to add 150-200 bbl/d each with minimal added variable cost, per bbl operating costs are expected to decrease by a further 30%. • We continue to forecast that Criterium will exit 2024 with ~1,250 boe/d production. At this ...

Valuation update

In this note, we show updated valuation statistics for the E&P sector.