MMA Offshore Ltd

MMA Offshore Ltd	MRM:ASX
Average volume	1.98m
Shares outstanding	373.01m
Free float	363.87m
P/E (TTM)	--
Market cap	156.66m AUD
EPS (TTM)	-0.1381 AUD
Annual div (IAD)	0.055 AUD
Annual div yield (IAD)	13.10%
Div ex-date	Sep 04 2015
Div pay-date	Sep 29 2015

MRM Dividend Details
 
Contract win and Full year Results: MMA Offshore Ltd (ASX: MRM) sometime back reported about its $100 million contract with energy giant Chevron to proffer its shore-based services from the Dampier supply base. This is expected to be beneficial for MRM in terms of supply base revenue. The company otherwise also reported full year results for 2015 with 34% surge in revenues to about $796.7m (including full year of Jaya operations), EBIT $86.9m up 8.3% (pre-impairment), NPAT $55.3m up 2.7% (pre-impairment), EPS 15.0 cents down 20.2% (pre-impairment), and reported net loss after tax $(51.3)m after $120.7m non-cash impairment charge. The final dividend of 1.5 cents per share (cps) brought full year dividends to 5.5cps per share. Operating cash flow of $185.4m was up 240.8%, cash balances came to $ 124.5 million and gearing (post impairment) was 40.8%. FY 2015 was an extremely challenging year for MMA owing to the fall in the price of oil. Oil and gas companies reacted swiftly by dramatically cutting capital expenditure in order to reduce operating costs and this materially affected vessel utilisation in the face of more intense competition. In response, the company also initiated a cost reduction program to increase its competitiveness and the program is on track to deliver at least $ 15 million in annualised savings. Moreover, the emerging economies like China and India are rapidly becoming large consumers of oil and gas and this could offset the weaknesses in the other parts of the world. MRM is currently trading close to its 52 week low price and has an annual dividend yield of 13.1%. We believe that the company still has the potential to take advantage of any favourable trend in oil prices and we would rate the stock as a Buy at the current price of  $0.42
 
 

MRM Daily Chart (Source: Thomson Reuters)
 
 

Mineral Deposits Limited

 

Mineral Deposits Ltd	MDL:ASX
Average volume	96.37k
Shares outstanding	103.68m
Free float	84.97m
P/E (TTM)	--
Market cap	49.76m AUD
EPS (TTM)	-1.135 AUD

MDL Details
 
Strong 3Q Results: Mineral Deposits Ltd (ASX: MDL) reported its 3Q 2015 operational review wherein MDL mentioned that the principal asset of the company is a 50% interest in the TiZir joint-venture which owns the Grande Cote Mineral Sands (GCO) operations in Senegal and the TiZir Titanium and Iron Ilmenite Upgrading Facility (TTI) in Tyssedal. GCO is on track and produced 176kt Heavy Mineral Concentrate in the third quarter of 2015 (rising 29% QoQ). Furnace relining and capacity expansion at TTI are on schedule after a successful shutdown in September. Additional contribution of USD 25 million of which 50% is the share of this company has been made to TiZir. Following unplanned downtime at GCO because of a series of unrelated events, mining operations have begun to perform at nameplate levels. The operations are on track to produce at levels in the third quarter which are an improvement on first-quarter and second-quarter performance.
 

GCO Production Volumes (Source: Company Reports)
 
The recent strong performances are due to a number of discrete projects the object of which was consistent levels of production to have increased use of the plant. Despite the continuation of soft commodity prices, the operation generated a positive EBITDA in August. The TTI expansion project continues to be on schedule both in terms of timing and budget. Prior to the shutdown, a batch of 100% GCO ilmenite was successfully processed in the kiln to ensure that there is sufficient intermediate stock before the resumption of operations in December. As regards the outlook, for the rest of 2015, the company will focus on completing all development activity so that it is in the best position at the start of 2016 to maximise cash flow and financial returns. We also note that MDL is currently trading close to its 52 week low price. We believe that the company has good future potential and recommend a Buy at the current price of $0.48
 
 
 

Beach Energy Ltd

 

Beach Energy Ltd	BPT:ASX
Average volume	9.63m
Shares outstanding	1.30bn
Free float	988.43m
P/E (TTM)	--
Market cap	833.84m AUD
EPS (TTM)	-0.396 AUD
Annual div (IAD)	0.015 AUD
Annual div yield (IAD)	2.34%
Div ex-date	Sep 02 2015
Div pay-date	Sep 25 2015

BPT Dividend Details
 
Slashes in Costs and the Merger with Drillsearch Energy: Beach Energy Ltd (ASX: BPT) released its report on the quarter ended 30 September 2015 wherein we note that sales volumes of 2.6 MMboe grew by 1% over the prior quarter because of higher sales gas demand during winter months and the initiation of the Original Retail gas sales agreement. Total sales revenue of $ 145 million was down 15% over the prior quarter because of lower realised oil prices partly offset by higher realised gas prices. Capital expenditure at $ 44 million was down 36% over the prior quarter in line with the curtailed program for FY 2016. BPT gave a guidance between $240 million and $270 million for capex for 2015-16, and lower spending in the September quarter was in line with the forecast. Cash reserves were $ 174 million, up $ 4 million from the prior quarter; the drawn debt was $ 150 million and the undrawn debt facility was $ 150 million. Final FY 2015 dividend of 0.5 cents per share brought total dividends paid for FY 2015 to 1.5 cents per share.
 

Key Statistics (Source: Company Reports)
 
The company also announced the merger of Beach and Drillsearch wherein the merger benefits include significant benefits for shareholders of both the companies, synergies from businesses that are complementary, the benefits of becoming Australia’s largest onshore oil producer and positioning for the East Coast gas market opportunity. The merger is to be implemented through a scheme of arrangement in which Drillsearch shareholders will receive 1.25 Beach shares for every share held. The transaction values Drillsearch at $ 0.83 per share on a market capitalisation of $ 348 million which is a premium of 27% to the last closing price. Drillsearch shareholders will own 30% of the combined group which will have a combined market capitalisation of around $ 1.16 billion. The combined guidance for production in FY 2016 is 10.6 to 11.8 MMboe. We believe that the merger transaction will put the company on a much stronger footing given the challenging environment and rate the stock as a Buy at the current price of $0.625
 
 
 

BPT Daily Chart (Source: Thomson Reuters)

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