In today’s briefing:
- S&P/ASX Index Rebalance Preview: Regular & Ad Hoc Changes in June
- Indian Energy Exchange: Do You Want to Earn a Royalty on India’s Economic Growth?
- Chariot Limited (AIM: CHAR): Drilling success onshore Morocco
- DRX: Here We Go Again; Increasing TP on Contract Announcement
- Valeura Energy (TSX: VLE): Drilling success likely to add further resources
S&P/ASX Index Rebalance Preview: Regular & Ad Hoc Changes in June
- With the review period complete, we take a look at the potential index changes at the June rebalance as well as potential index inclusions due to M&A.
- Timing is key for the ad hoc inclusions to the S&P/ASX 200 (AS51 INDEX) with an ad hoc inclusion being announced prior to the regular announcement.
- Passive trackers will need to buy 1.3-27x ADV on the expected adds and have 0.8-4.7x ADV to sell on the expected deletes. Shorts have built up on the potential deletes.
Indian Energy Exchange: Do You Want to Earn a Royalty on India’s Economic Growth?
- As one of the fastest-growing economies globally, India is projected to become the third-largest economy, trailing only China and the US, by 2027.
- Amid macroeconomic challenges worldwide, investors are eager to tap into India’s robust economic growth.
- However, economic growth does not always correlate with equity market growth, as seen in Spain and Italy during the 1980s and 1990s, and more recently in China.
Chariot Limited (AIM: CHAR): Drilling success onshore Morocco
- The OBA-1 well onshore Morocco has encountered an approximate 70 m gross interval containing elevated resistivities coincident with elevated mud gas readings, indicating potential gas pays, with no water-bearing reservoirs identified.
- While the approximate 200 m gross thickness for the reservoirs is in line with pre-drill expectations, the absence of water in the 70 m gross interval is particularly encouraging and could suggest larger than expected resources (12 bcf pre drill).
- The well is now expected to be tested in 3Q24.
DRX: Here We Go Again; Increasing TP on Contract Announcement
- ADF announced a series of new contracts totalling $90M spanning the pharmaceutical, industrial, and public infrastructure sectors.
- This includes additional work awarded for the pharmaceutical project in the Midwest U.S. which ADF was recently awarded phase 2 for.
- ADF will be reporting Q1/25 on June 11th, we are expecting $90.1M revenue (12% YoY), 23.5% gross margin, and $17.2M EBITDA (19% margin).
Valeura Energy (TSX: VLE): Drilling success likely to add further resources
- Two wells recently drilled at Nong Yao are likely to add some reserves.
- The 37H development well has been put on production from the primary reservoir at an initial flow rate of ~500 bbl/d net to Valeura’s WI.
- The well has also encountered 68 feet of net oil pay across eight separate appraisal target intervals.
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