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The Q1 22 results remained very healthy
More worrying is the downward revision in the group’s outlook, even if it had been somewhat expected
The cash generation remained solid.
We fear new downward revisions given the still-high level of demand and prices
We will adjust our numbers although the valuation is likely to stay broadly unchanged
Companies: ArcelorMittal SA
FY 21 EBITDA margin reached a record 25% (24% in Q4).
Prices have flattened in Q4 (at a high level though).
Financial debt is well under control despite the significant WC build up.
As a reminder, US$1bn will be spent on share buy-backs in H1 22. Further authorisations sought at the next AGM.
We will fine-tune our numbers, probably with no major changes.
The Q3 21 results were broadly in line with the street’s expectations.
The nice margins were supported by volumes but, most of all and as expected, prices.
The outlook is supportive for Q4 21/Q1 22.
Net debt is at record low levels (US$3.9bn).
A new US$1bn share buy-back was announced.
We will fine-tune our numbers, with probably no big change to our estimates.
The H1 21 results came in above consensus.
Q2 and H1 are the best released since 2008, on the back of sky-rocketing prices.
The performance is seen across the board with all geographies benefiting from very high prices.
The balance sheet is further deleveraged, enabling an extension of the share buy-back programme to US$2.2bn.
We will upgrade again our forecasts and target price, even if the visibility for FY22 is still very low.
The Q1 21 results came quite significantly above (high) expectations
Volumes and prices held up very well across the board
A new share buy-back programme is announced
We expect to revise upwards our numbers and valuation
FY20 results came in better than the street’s expectations
The group anticipates a rebound in steel demand for FY21
A new cost-cutting programme is in place (US$1bn until FY22)
The net debt level is the lowest since 2006
Resumption of a dividend payment and a new share buy-back programme
ArcelorMittal is to dispose of its US operations (ex Calvert) to Cleveland-Cliffs through a share and cash deal.
The divestiture of AM US makes sense in our view from a strategic point of view.
It also further strengthens the group’s balance sheet, the group having reached its deleveraging targets.
US$500m will returned to shareholders thourgh a share buy-back.
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Forecast and valuation update
Companies: IOG PLC
Companies: Savannah Energy Plc
With several opportunistic but timely acquisitions in 2021, coupled with the recent surge in the oil price, Zenith Energy has, in our view, completely transformed itself and its value proposition to investors. While for various reasons it has not been easy for the market to fully recognise and reward this transformation, we expect 1) doubling production, 2) further strengthening of its balance sheet and 3) becoming Free Cash Flow (FCF) generative this year, will make it difficult for the market
Companies: Zenith Energy Ltd.
Alternative Resource Capital
We are increasing our fair value estimate for Pantheon Resources to 208p, from under review (previously 184p). The change reflects what we believe was an unambiguously positive winter drilling campaign. This full note details the background analysis to the change in estimate of fair value, which includes a valuation table and an assessment of the forthcoming Alkaid#2 well.
Companies: Pantheon Resources plc
Chariot has signed a front-end engineering and design (FEED) agreement with Schlumberger and Subsea 7 (the Subsea Integration Alliance) for the Anchois gas development project. Chariot and the Subsea Integration Alliance will adopt a “one team” integrated and collaborative approach to fast-track first gas from Anchois to maximise the return on investment for all stakeholders. The scope of work covers all the development's offshore elements including well completions and subsea production systems
Companies: Chariot Limited
RCS-1 flow testing results
Companies: Arrow Exploration Corp.
Trinity has announced the commencement of its highly anticipated onshore drilling campaign. The Company's fully funded, six well drilling programme will target an aggregate 450-1,100mmbbls of reserves at a cost of US$14-17m. In addition to drilling four “conventional” low angle wells, Trinity will also drill one horizontal well and one deeper appraisal well, with both the horizontal and deeper appraisal wells having the potential to deliver substantially higher production and economic returns ve
Companies: Trinity Exploration & Production Plc
EQTEC has reached a key milestone in its Southport energy from waste project with the appointment of Anaergia as EPC and O&M partner. This is a complex project using multiple waste treatment solutions and we see EQTEC’s inclusion as a demonstration that it’s technology can combine with these to create an optimal outcome.
Companies: EQTEC PLC
Wentworth has announced a positive operational update ahead of its AGM to be held later today. Daily production year-to-date (YTD) has averaged 92.2MMscf/d, a c15% YoY increase (2021: 79.9MMscf/d) and ahead of Wentworth's 2022 guidance of 75-85MMscf/d. As noted previously, the strong performance of the Mnazi Bay asset YTD has allowed Wentworth to increase its total dividend distribution in respect of 2021 to 1.7p per share, a yield of c7.1%. Mnazi Bay continues to supply Tanzania with half of th
Companies: Wentworth Resources PLC
• Section II of the Northern Peruvian Pipeline has been temporary re-opened.
• As a result, 0.72 mmbbl of PetroTal’s Bretana oil has been tendered at the Bayovar port by Petroperu for the July lifting. This oil previously entered the pipeline in late 2020 for which PetroTal was paid just ~US$45/bbl at the time.
• PetroTal will receive the difference between this price and the price at which Petroperu will sell the oil in July (~US$120/bbl), generating over US$60 mm of price adjustment true-up r
Companies: PetroTal Corp.
Wentworth has announced the acquisition of a 25% non-operated working interest in the Ruvuma PSA from Scirocco Energy for an initial consideration of US$3m plus contingent payments of up to US$13m. The consideration is structured to ensure that the majority is only paid in a success case, providing Wentworth with a low-cost entry point into a high growth opportunity. The transaction has the potential to nearly double the Company's production by 2026 and add over 190Bcf of 2P reserves on a Final
Completion of commissioning of Kiln 3 at Vanchem last month keeps Bushveld on track to end 2022 with a sustainable production run rate of 5,000-5,400t V pa, a solid platform from which to refocus on longer-term growth. Fully utilising the vast array of processing infrastructure at Vanchem to treat feed from an expanded mining and ore concentration operation at Vametco makes a lot of sense given the fixed component of costs at the former and the large mineral resource at the latter. Bushveld’s re
Companies: Bushveld Minerals Limited
• 2022 YTD gross production was 92 mmcf/d, ahead of our expectations of 89 mmcf/d for 1H22.
• The FY22 production guidance remains unchanged at 75-85 mmcf/d. It looks very conservative in our view.
• The company currently holds US$26 mm in cash and no debt. This is in line with our expectations.
• TPDC continues to be current with regards to receivables.
• We re-iterate our target price of £0.45 per share.
Steady growth and dividend
Our Core NAV for the company based on its 2P reserves only i
Savannah, which operates the Barroso lithium mine project in Portugal, reports today the results of its locked cycle test to determine optimal flotation reagents to confirm lithium recoveries and spodumene concentrate grades. Savannah is aiming for a 5.5%Li2O concentrate grade with a near 80% recovery. The reported work confirms that these should be possible and that in larger scale, bulk testing these parameters may improve. The work also highlights that there are still optimisations to be h
Companies: Savannah Resources Plc