Petroleum Firm Sells Assets to Focus on Montney Projects

Source: Streetwise Reports 12/11/2019 The details, finances and impact of the transaction are discussed in a CIBC report. In a Dec. 6 research note, CIBC analyst Jamie Kubik wrote that Paramount Resources Ltd.’s (POU:TSX) disposing of 8,500 barrels of oil equivalent per day (8,500 boe/d) of production will not materially impact the energy company’s cash flow in the future. “We view the move favorably,” he added. Paramount sold the assets for a total value of CA$55 million. Metrics of the transaction were “modest,” Kubik noted, at 320,000 net acres of mineral rights (CA$172 per acre), 8,500 boe/d production (CA$6,470/boe/d), 15.9 MMboe of Proven reserves (CA$3.46/boe) and 20.1 MMboe of Proven and Probable reserves (CA$2.74 per barrel). In addition, Paramount’s capital plans for the assets were “minimal,” Kubik pointed out. Thus, CIBC lowered its estimated 2020 capital spend for the company to CA$550 million from CA$600 million. “With the disposition, Paramount will have less maintenance capital required for assets outside of its Montney acreage moving forward, and management has also pointed to cost savings in its recent drilling efforts,” noted Kubik. Paramount has focused primarily on developing its Montney assets, Karr and Wapiti. Going forward, “further refinement of the portfolio is likely to be viewed favorably, helping enhance the financial and operational torque to the company’s flagship properties,” Kubik commented. As for spending in 2020, CIBC expends it to be high to ramp up production at Karr and Wapiti and models the amount at about CA$150 million, Kubik wrote. Proceeds from … Continue reading

Oil & Gas Producer Doubles Share Buyback Program to $50 Million, Increases Guidance

Source: Streetwise Reports 12/11/2019 Recent company announcements are discussed in a Pareto Securities report. In a Dec. 10 research note, Pareto Securities analyst Tom Erik Kristiansen reported that Gulf Keystone Petroleum Ltd. (GKP:LSE) announced a $25 million share buyback and increased its 2019 production guidance. “Overall, we view today’s news as significantly positive,” he wrote. The analyst addressed both developments. Regarding the share buyback, the Gulf Keystone will increase the total amount of share buybacks it announced this year to US$50 million, the same amount that the company paid in 2019 in dividends. This equates to 20% of its enterprise value and 17% of its market cap. The energy firm not only did this but, also, continued to invest capital in increasing production. “We find this highly impressive,” commented Kristiansen. As for its current financial status, oil and gas producer has a cash balance of US$206 million. “This also implies that Gulf Keystone will maintain a robust balance sheet,” Kristiansen indicated. In addition, the company is due to receive another export payment soon. As for full-year 2019 production guidance, Kristiansen relayed that Gulf Keystone reverted back to its initial production estimate for Shaikan, located in Iraq’s Kurdistan region, to 32,000–38,000 barrels per day (32–38 MMbbl/d) gross from 30–33 MMbbl/d (the company had lowered guidance to this range earlier this year). This change back to the higher guidance resulted from strong production from the first well drilled in the Shaikan field, which began on Nov. 13. During that month, output averaged … Continue reading

A.I.S. Resources: A New Gold Prospect + Manganese Trading + Li Extraction Technology

Source: Peter Epstein for Streetwise Reports 12/11/2019 Peter Epstein of Epstein Research profiles a company that is reinventing itself as moderately diversified battery metals company. In the midst of tax loss selling across many sectors—not just battery metals (lithium, cobalt, manganese, vanadium, etc.) but cannabis/hemp segments as well (and most other metals/mining/mineral sectors)—A.I.S. Resources Ltd. (AIS:TSX.V; AISSF:OTSQB) recently announced good news. Is the market ignoring ongoing positive developments at the company? Management has successfully arranged for the supply of up to 30k tonnes/month of high-grade (48%–52%) Manganese (Mn) to China and is embarking on a trial shipment of 5–10k tonnes. Reaching this significant tonnage (which is not a sure thing) has been a consistent goal since April/May. If A.I.S. achieves 20k–30k tonnes/month, it would be an excellent outcome, assuming it can consistently deliver in that range. Management has arranged the Mn sourcing with two African suppliers, and is negotiating a supply agreement with giant, multi-billion dollar Erdos Group, one of the world’s largest buyers of Mn. A.I.S. has issued a term sheet for a trial shipment of 5–10k tonnes, expected in January. The fact that Erdos is willing to work with A.I.S. is an impressive vote of confidence in the management team. The trial shipment will reportedly gross ~US$2 million, subject to a final delivered grade of ~50% Mn. A.I.S. will be responsible for all logistics, including quality control, assays, shipping and related activities. Additional suppliers from Brazil and Panama, among other places, have approached management about selling ore into … Continue reading

'Huge Upside Potential' on Firm That Turns Plastic Waste into Synthetic Fuels

Source: Streetwise Reports 12/05/2019 The rationale for investing in this company is provided in a Pareto Securities report. In a Dec. 2 research note, analyst Tom Erik Kristiansen reported that Pareto Securities initiated coverage on Quantafuel SA (QFUEL:NO) with a Buy rating and a NOK250 per share target price that “upon proof of commerciality could more than double over the next year.” Further, Quantafuel is “likely to add additional projects to its portfolio that leads to an even larger long-term upside potential.” The current share price is NOK165. Kristiansen highlighted that Quantafuel is “well positioned to benefit from its potential first mover advantage in a large, underserved chemical recycling market.” Also, it has a scalable business model and a well-defined plan to facilitate growth near term. The company produces high-quality synthetic fuels and chemical products, such as low-carbon diesel, naphtha and heating oil, from nonrecyclable plastic waste through a proprietary chemical process. This affords the business an attractive environmental social governance profile. The next major catalyst for Quantafuel, scheduled to occur shortly, by year-end 2019, is the launch of commercial production at its plant in Skive, Denmark, Kristiansen relayed. “If successful, Quantafuel will have the first, large-scale commercial plant for chemical recycling of plastic waste in the world,” he added. It also will then, with its partners, look to expand in the short term, building two more facilities, each with a capacity of 300 million tons per day, likely in Antwerp and Bayern. Quantafuel already has plans to triple the … Continue reading

Vanadium Company Uncovers New Gold Target in Nevada Project

Source: Peter Epstein for Streetwise Reports 12/03/2019 First Vanadium CEO Paul Cowley speaks with Peter Epstein of Epstein Research about the state of the vanadium market and his company’s plans to explore the newly found gold target on the Carlin Trend in Nevada. First Vanadium Corp. (FVAN:TSX.V; FVANF:OTCQB) is one of the very few survivors of a brutal sell-off in Canadian and Australian-listed vanadium juniors. Nearly a dozen of the 100+ names I’m tracking are down more than 80% from their respective 52-week highs. Even industry-leading vanadium producer Largo Resources is not immune; it’s down 74%. Since the Chinese vanadium pentoxide (V2O5) price hit an inflation-adjusted 13-year high of US$33.9/lb about 12 months ago, prices have plunged 82%. Few experts expected the price to remain above US$30/lb, or US$25 or US$20 for that matter. But, the current price of $6.2/lb is half or less of what most vanadium juniors were hoping to base their preliminary (PEA, PFS) economic studies off of. Most new projects on the drawing board simply don’t work at today’s prices. However, First Vanadium’s large, high-grade, near-surface, primary vanadium project in Nevada could potentially be viable at a price below US$10/lb. [NI 43-101 resource: 303 million pounds Indicated @ 0.615% V2O5] / [75 million pounds Inferred @ 0.52% V2O5] [Corporate Presentation] Readers may recall that First Vanadium’s property is in the Carlin Gold Trend. CEO Paul Cowley knew he had one or more gold targets at depth, but two years ago, he had a straightforward, low-cost shot … Continue reading

Coverage Initiated on Energy Efficiency Firm, 'One of a Kind Stock'

Source: Streetwise Reports 11/30/2019 The thesis for investing in this company is provided in a Raymond James report. In a Nov. 21 research note, analyst Pavel Molchanov reported that Raymond James initiated coverage on Ameresco Inc. (AMRC:NYSE) with a Strong Buy rating and a $20 per share target price. The stock’s current share price is around $16.35. Molchanov reviewed the key aspects of this large U.S.-based energy service company with a footprint in all 50 states. One is that Ameresco is a “one stop shop for energy efficiency” and the only pure play in the space, affording “investors unique leverage to the efficiency theme.” Two, Ameresco’s business lines are diverse as are its customers, which are commercial entities and public and nonprofit institutions, Molchanov highlighted. One service the company provides is implementation of energy efficiency solutions, for which it receives revenue upfront. Other recurring revenue comes from operations and maintenance. The fact that buildings are projected to be a major component of the energy efficiency trend in the future is significant, Molchanov purported. An estimated 45% of U.S. construction companies plan to have 60%-plus “green building” projects by 2021, up from 32% in 2018. Part of this is cities and states mandating energy efficiency in buildings. A third revenue source for Ameresco is its expanding portfolio of solar power and landfill gas assets, an area of current growth focus for it. “This in-house capacity buildout requires more capital deployment, but the result is a more predictable and higher-margin revenue mix,” … Continue reading

'This is Amazing': Technical Analyst Rates Oil & Gas Small Cap Strong Speculative Buy

Source: Clive Maund for Streetwise Reports 11/25/2019 Technical analyst Clive Maund details the fundamentals for this oil & gas firm and explains why he sees it as a strong speculative buy. After a prolonged period of adversity and depression it looks like Amazing Energy Oil & Gas Co. (AMAZ:OTCQX) has at last “cleaned the clock” with respect to the obstacles that have been blocking its way until recently. In the first place, it has sorted out the problematic situation with the Miesners. As published on the 13th in the company’s 10K… “In November 2019, the company came to terms on a proposed agreement with Jed and Lesa Miesner (the “Miesners”), and their affiliated companies JLM Strategic Investments, LP (“JLM”), Petro Pro, Ltd. (“PPL”), US Petro, LLC (“US Petro”). Pursuant to the agreement, the Company will pay the total sum of $1,750,000 to the Miesners and/or their affiliated entities. “The proposed agreement provides that the Company will acquire all right, title and interest in and to three notes and mortgages/deeds of trust, with a value of approximately $4,200,000 held by the Miesners, JLM, and PPL, respectively. Furthermore, the parties have agreed that the Miesners, and their related affiliates, will surrender all of the shares of the Company’s common stock held by them, forgo any claims to all options to acquire shares of the Company’s common stock, all warrants to purchase the Company’s common stock, and any claims for compensation and wrongful termination pursuant to Jed Miesner’s former employment agreement with the … Continue reading

Skyharbour About to Embark on Deep Drill Program in Athabasca Basin

Source: Maurice Jackson for Streetwise Reports 11/25/2019 Skyharbour CEO Jordan Trimble discusses uranium supply and demand fundamentals with Maurice Jackson of Proven and Probable and his company’s upcoming drill program in the deep rocks of the Athabasca Basin. Maurice Jackson: Joining us for a conversation is Jordan Trimble, the president, director and CEO of Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQB). Glad to speak with you today to provide shareholders updates on a number of key developments that are currently taking place with Skyharbour Resources Ltd.. Today’s interview will focus on the uranium price and upcoming news flow. Before we delve into these topics, Mr. Trimble, for someone new to the story, please introduce us to Skyharbour Resources, A Preeminent Uranium Explorer in Canada’s Athabasca Basin, and the opportunity the company presents to the market. Jordan Trimble: Skyharbour Resources is a high-grade exploration and early stage development uranium company. We have six projects located in the Athabasca Basin, which hosts the highest-grade depository of uranium in the world. Some notable recent discoveries there were made by companies like NextGen, Fission and Denison. The six projects were acquired over the last several years. We spent the first few years when I started running the company acquiring these projects and did a good job of being opportunistic in a tough uranium market wearing our contrarian caps and going out there and buying these projects for really pennies on the dollar. It’s a big land package, about a half a million acres of ground. Again, … Continue reading

Oil & Gas Royalty MLP Benefits from 'Record Production in Q3/19'

Source: Streetwise Reports 11/23/2019 The quarterly highlights are provided in a Raymond James report. In a Nov. 7 research note, Raymond James analyst John Freeman wrote that Kimbell Royalty Partners, LP (KRP:NYSE) “reported record production in Q3/19, making way for about an 8% sequential distribution growth.” This quarterly result exceeded consensus’ estimate by about 11% and Raymond James’ forecast by about 2%. Freeman highlighted that Kimbell achieved this despite the number of rigs on its acreage dropping in Q3/19 by 8%, driven by an industry slowdown. “We believe [this] is a testament to the low Proven Developed Producing (PDP) decline strategy that Kimbell employs,” he added. Consequently, the master limited partnership (MLP) increased its Q4/19 guidance at the midpoint by about 5% to 11,600,000–12,800,000 barrels of oil equivalent per day, in line with the Street’s guidance. One of the highlights in Q3/19 was the quick result from Kimbell adding a team member to “proactively search for and recover production in suspense across its asset base,” noted Freeman. Within only two months, the move benefitted the MLP to the tune of about $600,000 in cash flow that otherwise would have been delayed indefinitely. “This should be an incremental benefit as Kimbell continues to improve this process going forward, so we could see more positive surprises in future quarters on this front,” the analyst added. Also in Q3/19, Kimbell’s microstrategy joint venture closed on $3 million worth of microscale deals. Since Q3/19 ended, the MLP closed another acquisition, $10 million for 186 … Continue reading

Uranium Major 'Heading Into a Bigger Q4'

Source: Streetwise Reports 11/23/2019 The Q3/19 results and the Q4/19 outlook are outlined in a BMO Capital Markets report. In a Nov. 5 research note, BMO Capital Markets analyst Alexander Pearce wrote that following the reporting of Q3/19, the outlook for Cameco Corp. (CCO:TSX; CCJ:NYSE) “remains robust, with a strong balance sheet and upside potential if uranium prices recover quicker than expected.” Q4/19 is expected to be more active than Q3/19, as is typical for the uranium company, Pearce noted. For one, BMO expects Cameco to make record purchases in Q4/19 of greater than 7,000,000 pounds (7 Mlb) of uranium, including 1.2 Mlb from Inkai, to meet the midpoint of guidance. Further, BMO expects Cameco to sell 13.5 Mlb of uranium in Q4/19, which would constitute a quarterly record and which should drive CA$157 million of free cash flow. An improved uranium price would boost Cameco’s multiples, and BMO also expects the price to increase in the near term. This would result from a continued supply deficit and increased competitive tension in the spot market from Cameco’s purchases. As for Q3/19, Pearce reported that Cameco experienced an estimated loss of CA$0.13 per share versus BMO’s forecast loss of CA$0.01. The loss was mostly due to the company selling less uranium than expected, a total 6.1 Mlb versus 7.2 Mlb. Regardless, Cameco subsequently maintained guidance for sales and purchases. BMO lowered its EBITDA estimates, by 1% for 2019 to CA$408 million and by 2% for 2020 to CA$382 million. Cameco ended … Continue reading