Daily Brief Energy/Materials: Crude Oil, Anhui Conch Cement, PetroTal, VAALCO Energy, Valeura Energy Inc, Valvoline and more

• US commercial crude oil inventory fell by 1.36 million barrels for the week ending on 3/May, after rising by 7.3 million barrels the week before.
• EIA increased its global liquid fuels production for 2024 and 2025 by 110,000 bpd and 40,000 bpd, respectively.
• EIA forecasts OPEC’s spare production capacity around 4 million bpd through 2025.

• Stable cement price, good cost control, and a better base for comparison will lift Anhui Conch Cement (914 HK)‘s profitability recovery in 2-4Q24.  
• Anhui Conch’s earnings outperformed in 1Q24. Its peers are making losses and hence will reduce excess supply. Stabilisation of the real estate market will lower the pressure on demand.
• Net cash equals 46% of the current share price, and its valuations (both PER and P/B) are inexpensive relative to peers and ROE.  

• PetroTal is acquiring Block 131 onshore Peru including the Los Angeles field from CEPSA for US$5 mm.
• The field produces ~900 boe/d from 4 existing wells and holds 4.9 mmbbl of 40-45 deg API oil 2P reserves.
• We estimate that 3 new wells (at ~US$12 mm per well) could increase production to 2-3 mbbl/d.

• 1Q24 WI production was 21,807 boe/d, in line with our expectations.
• VAALCO held ~US$113 mm in cash at the end of March, which is also in line.
• With the completion of the acquisition of Svenska, the company now expects to produce 23.6-26.5 mboe/d in FY24.

• • The 1Q24 production of 21.9 mbbl/d and cash position of ~US$194 mm at the end of March had been reported previously.
• • Operations are on track.
• Drilling is underway at the Nong Yao A platform, with two new wells that are expected to be completed in the coming week.

• Valvoline is the largest pure-play operator in the oil change industry, trading at around 16 times estimated FY25 EPS
• The company plans to accelerate unit growth from 140 to 250 openings per year over the next five years
• Valvoline has a focus on driving incremental ticket growth and strong competition in the market, positioning it for success with a solid foundation from its long history in the industry

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.