COOPER ENERGY LIMITED (ASC: COE)
COE Details
Gearing up at Casino Henry and Sole Project: With 50% interest and being the operator of the Casino Henry gas project, Cooper Energy is getting some boost (up 4.8% on March 12, 2018) with the news that the Diamond Offshore Ocean Monarch drill rig has completed mobilisation from offshore Fremantle to the Casino Henry gas project, Otway Basin, offshore Vic on 10 March 2018. The workover of the Casino-5 well is about to start. The workover is expected to take 22 days to complete.
Impact of Sole on Cooper (Source: Company Reports)
The exploration and production company that generates revenue from gas supply to south-east Australia and low-cost Cooper Basin oil production, has 100% interest in the Sole gas field that is developed to provide a new source of gas supply to south-east Australia in 2019, and on completion of the workover at Casino-5 well, the Ocean Monarch will move to the Sole gas field to drill and complete the Sole-3 and Sole-4 production wells for development of the field as part of the Sole gas project. This, thus paves the path for future potential given the Project was 30% complete at the end-January 2018 while supply has been planned for mid of CY19. The supply forecasts in 10 years (2028) indicated that over 75% of gas is needed to come from undeveloped or new supply, and Cooper aims to cater this through its growing portfolio of contracts and supply to south-east Australia customers over 2019 –2025 with returns for shareholders kept in mind. We have a “Buy” recommendation on the stock at the current price of $0.325
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COE Daily Chart (Source: Thomson Reuters)
INFIGEN ENERGY LIMITED (ASX: IFN)
IFN Details
Rise in monthly production: While Infigen is looking to develop renewable energy projects at the back of rising demand for renewable sourced energy and decreasing cost of development, the group’s monthly production for February 2018 has been 117 Gwh against February 2017 production level of 110 Gwh, representing a growth of 6% However, the year to date FY18 production has slipped by 2%. The interim financial results for the FY 2018 had indicated that the Company’s NPAT for the six-month period ended 31 December 2017 rose to $26.7m, up $5.3m (25%) on the prior corresponding period (pcp). The group also entered into a Commitment Letter in respect of $525m Term Facilities with 5-year maturity, while Goldman Sachs is providing the financing commitment subject to agreed terms and conditions. Further, $80m of Liquidity Facilities with a 5-year maturity have been sought while the group expects to have FY18 corporate costs to be $13.5m. We give a “Speculative Buy” recommendation at the current price of $0.595, given the prospects related to commercial operations at Bodangora being on track for Q1 FY19 (to add valuable capacity) and Cherry Tree Wind Farm being investment ready.
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IFN Daily Chart (Source: Thomson Reuters)
SENEX ENERGY LIMITED (ASX: SXY)
SXY Details
Positive progress at different fronts: Senex has been gaining traction since last year with the award of a prime coal seam gas acreage by the Queensland Government following a competitive tender. The group has its growth trajectory set in support from global LNG demand, oil pricing, structurally short Australian East Coast gas market with strong demand and pricing, $82m cash on balance sheet and step-change East Coast gas development projects. Senex has now commenced a new drilling campaign on the western flank of the Cooper Basin, SA as per its February 2018 updates. The Growler-15 well is the first Company operated Birkhead horizontal well in the western flank and has been targeted for increasing the overall recovery from the growler oil field and accelerating production from the mid-Birkhead reservoir. The well was spudded on 18 February and the group expects to reach a total depth of 3,049 metres with a vertical section of 1,737 metres TVD (total vertical depth) and horizontal section of 1,030 metres. The drilling has moved ahead on the horizontal section.
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Strategic Positioning (Source: Company Reports)
With the fact that SXY’s East Coast gas business will drive major production and earnings growth from 2019, the group has undertaken a comprehensive asset portfolio review to prioritise future capital allocation to accelerate the gas project development. The group expects material production, cash flow and earnings to be flowing from the East Coast gas business and western flank oil assets. In this regard, the financing discussions with lenders has progressed positively and on schedule for financial close in mid-2018. Given the stock price rise of 18.75% in last six months towards higher trading levels (up 3.95% on March 12, 2018), we have a “Hold” recommendation at the current price of $0.395
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SXY Daily Chart (Source: Thomson Reuters)
BEACH ENERGY LIMITED (ASX: BPT)
BPT Details
Drilling Progress: Beach Energy’s latest monthly drilling report for February had indicated that Stunsail-6, the first well of the second phase targeted horizontal development of the Birkhead Formation at ex PEL 91 and this will be brought online by Q4 FY18. This well is designed to develop the Birkhead reservoir and evaluate the effectiveness of the development technique within the reservoir. At ex PEL 104/111, Growler-15 is targeting the Birkhead Formation with the objective to develop reserves and accelerate production from the mid-Birkhead reservoir encountered by the previous Growler wells. The 4 well oil campaign in the Cocinero Field in southwest Qld continued and a 5 well gas and oil development campaign also continued in the Tirrawarra-Gooranie Field. Beach Energy’s FY18 half year results indicated underlying NPAT growth of 5% to $93m while NPAT plunged by 7%, and the group enhanced its production guidance due to additional wells to be drilled and connected with better than expected incremental oil production from Western Flank artificial lift installations, and initial production from recent well connections. Recently, Paradice Investment Management Pty Ltd reduced its interest to 6.24% from 7.29% in BPT. Given the trading levels and potential factored in the stock price, we believe that the stock is “Expensive” at the current price of $1.32
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BPT Daily Chart (Source: Thomson Reuters)
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