Bahamas Petroleum Company - Countdown has begun

Bahamas Petroleum Company (“BPC” or the “Company”) is in the final stages of completing the funding necessary to drill its inaugural exploration well offshore Bahamas. With an estimated 1,030mm bbl of Prospective Resources (UBEST) targeted by its first well, the current valuation is undemanding; we estimate fair value to be $89.7mm (3.6p/share), a 53% premium to the current price.

G3 Exploration - Accelerated monetisation of production assets

Potential equity released to G3 Exploration (G3E) stakeholders through the company’s planned Hong Kong listing of the producing assets remains a key catalyst and valuation benchmark. Management believes that net proceeds from the IPO will enable the company to redeem the Nordic and GIC bonds using the new capital raised within the Hong Kong listed vehicle to fund CBM drilling activity on the producing GSS and GCZ blocks. At this stage, G3E’s valuation is heavily dependent on the success of t...

Capital Network: G3 Exploration Limited - Operational update

G3 Exploration (LON:G3E), previously Green Dragon Gas, published an operational update for its Baotian-Qingshan (GGZ) Block, located in the Guizhou Province of Southern China.

Green Dragon Gas - Capital Network: Plans to List Production Subsidiar...

Green Dragon Gas Ltd (LON:GDG) announced its plans to list its production subsidiary on the Hong Kong Stock Exchange as a dividend in specie. This operation requires shareholders’ approval and a vote will take place at the AGM to be held on 20/12/17 at 11:00 am. We expect the details of the listing, in particular the shareholding structure of the listed entity as well as the amount of capital increase, to be released on this occasion. However, the intention is for the company to be debt free as ...

- Debt maturity extensions

Green Dragon Gas (GDG) has announced that it has progressed discussions with the majority of its debt holders to extend existing debt maturities to 20 November 2018. Extensions are subject to the execution of amendments and an inter-creditor agreement between debt holders, and are expected to be finalised on or before 15 November 2017. GDG’s Nordic Bond (US$88m) will be extended to 20 November 2018 and the put option on GDG’s convertible bond (US$50m) will be extended to allow for conclusion of ...

Green Dragon Gas - Capital Network: Alignment of Interests between Par...

Green Dragon Gas Ltd (LON:GDG) announced that it has finalised agreements with CUCBM, a subsidiary of CNOOC and Green Dragon Gas Ltd (LON:GDG) partner in the GSS and GSN Blocks, which conclude eight years of discussions regarding Green Dragon Gas Ltd (LON:GDG) interest in the wells historically drilled by CUCBM in the two Blocks. These agreements confirm the respective interests of the partners as well as the amount of costs recovery resulting from CUCBM’s work programme for the period 2007-2014...

- PSC and supplementary agreement MoU

Green Dragon Gas (GDG) has announced that it has finalised a Memorandum of Understanding (MoU) on five production sharing contracts (PSCs) and two supplementary agreements with China United Coalbed Methane Corporation (CUCBM), a subsidiary of China National Offshore Oil Corporation (CNOOC) for the GSS and GSN blocks. Management believes the MoU is a material milestone for the company, and that joint co-operation with CNOOC on the exploitation of the GSS and GSN blocks should lead to enhanced gas...

GSS Zaoyuan ODP

Green Dragon Gas (GDG) has announced that the China National Development and Reform Commission has approved a project code for the overall development plan (ODP) on the Greka Shizhuang South (GSS) Zaoyuan portion of the main GSS block, concluding that the ODP does not require an approval process and only requires registration. We wait for further details on the debt access or project finance that this ODP registration will afford GDG, such that the company can fund an accelerated drilling progra...

ODP submission: Green shoots

2017 is likely to be a critical year for Green Dragon Gas (GDG) as management works to deliver on several milestones that will enable a step-up in activity levels. We were encouraged by the CNPC approval and submission of the GCZ CBM Block overall development plan (ODP) in April. Execution of supplementary agreements and GSS ODP submission would provide an incremental reserve base for GDG to leverage in order to refinance outstanding bonds and fund further drilling activity. With regard to fundi...

Green Dragon Gas - Turnaround in Production Performance

​Green Dragon Gas (GDG) published FY16 results on April 27th. We are encouraged by the 5.6% production increase y-o-y, which although 8% lower than our expectation, demonstrates the positive impact of the improved compression at the wellhead in the GSS block. We believe that the drilling of 147 new wells in GCZ, following the recent approval of the ODP by the Chinese authorities, will participate in a turnaround in production performance. We are also pleased by the lower operating costs achiev...

Recapitalising to maximise value

Green Dragon Gas (GDG) has laid the foundations for what could be a world-class CBM development; however, the company’s ability to develop and monetise the resource before PSC expiry in 2035 is contingent on funding. 2P reserves (net 549bcf) continue to rise as GDG proves gas deliverability from incremental coal seams. As it stands, GDG is funding rather than resource constrained. In this note we look at three valuation scenarios; in our base case we assume that GDG uses RBL debt capacity (conti...

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...

Outlook: Time to monetise strong CBM resource position

Green Dragon Gas (GDG) is tantalisingly close to realising a step change in production that would move it from a resource play to an established producer. Against a robust macro backdrop largely insulated from oil market volatility, we expect GDG to move profits into the black in 2016 as production increases beyond the 12bcf pa 2015 exit rate. Ongoing buildout of 53bcf pa of gas processing capacity at GSS should remove any capacity constraints in 2016/17. The coming months are also critical for ...

Institutional Comment: Daily comment

Update: China's gas fuelled wall of cash

Green Dragon Gas’s (GDG) move to the Main London market gives an increasing number of investors access to this key Chinese energy pure-play gas producer. The company is at the forefront of developing extensive coal bed methane (CBM) resources through favourable PSCs in conjunction with Chinese heavyweights CNOOC and PetroChina. Having been subjected to intensive UKLA due diligence, any lingering doubts around title and wider “China issues” should now be firmly a thing of the past. Instead,...