Daily Oil & Gas Monitor
() ? Worldview Ups its Stake to ~14%: Today?s RNS outlining the fact that Worldview now has 14% of the share capital steps up the pressure in what is shaping up to be a proxy fight. While Worldview may, or may not, be successful, what this has done is highlight the fact that the Board is short of Oil & Gas experience, and would benefit from bulking up. Worldview?s independent candidates seem to be sensible choices, James Dewar would add financial muscle to the Board, although it still needs a strong, results orientated CFO and Yves Merer would add E&P technical understanding. We don?t believe that either of these candidates can be deemed revolutionary, but similarly, nor do we believe that they would be pushovers. But, to make a difference, they need to be supported by shareholders, and have their independence enshrined. The only contentious selection that we would see for shareholders, and the incumbent board, is Andrey Kruglykhin. With ~14% of the issued equity, arguably Worldview are entitled to a Board seat (especially as there is provision for a Board of twelve), and his Russian political credentials would suggest that his presence on the Board would add value, but activist shareholders don?t always enjoy the most constructive of environments. Nevertheless, the tension that exists can be harnessed constructively as a fresh approach and perspective can bring rewards, which would benefit all shareholders. We will watch with interest.
JKX () ? Step in the Right Direction, but a Small One: Today?s announcement from JKX is a positive for the Company, but it doesn?t exactly move the needle. JKX has come through a difficult time, but there is still a lot to do before its cash flow reaches sustainable levels, and starts to dramatically strengthen the balance sheet.
In this news:
? Remaining 2P reserves for Elizavetovskoye (Ukraine) have been revised upwards to 22bcf
o Further 20mm bbl net prospective resources estimated in the licence
? Licence was acquired in November 2004 and finalised the JPA for the three legacy wells on the licence in late 2011. The M-53 well to production in April 2012 and receives 33% of the production from it
o The well continues to flow at 2.7 MMcfd on a restricted choke
? Five well development of the licence continuing
? Spudding of the first new well is scheduled for mid-year ahead of installation of new production facilities in the third quarter
o First gas is anticipated in the fourth quarter of 2013.
News in brief:
? EnQuest (LON:ENO) ? Balance Sheet Bolstered ? Another Sign that the Markets are Thawing?: The ?144mm bond (5.5% due 2022) underlines the fact that the markets appear to be thawing, and access to liquidity, for companies that can demonstrate cash flow, is becoming easier to achieve.?
? () ? Azimuth Deal Gets More Legs, but Where is it Going?: The extension of the Azimuth deal is another step forward for the Company, but now we need to start to see the full programme that Azimuth is going to undertake for its working interest.?
? () ? Does the Interim Statement Suggest the Company has Turned the Corner?: Today?s interim statement suggests that progress is being made in moving the Company away from the horibilis it has endured recently (Gujarat $1bn tax bill), especially as Stanlow appears to have enjoyed an uptick in refining margin (despite a fire in the convection section of a furnace), but as this management team have proved in the past, they are not always alive to the issues before they happen ? as what happened in Gujarat ? and given the fact that the debt pile seems to be getting bigger, the room for manoeuvre is shrinking. Consequently, while this news should be received positively, the Company is not in the clear yet.?
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