Daily Brief Energy/Materials: Energy Absolute, Silver, John Wood, Brookside Energy, Criterium Energy and more

• Countries across the ASEAN region continue to invest on developing their respective EV markets with governments introducing new initiatives and offering further incentives.
• The price war among Chinese EV players has escalated in recent month, causing pressure on non-Chinese players. European and Japanese EV makers are increasingly looking at ASEAN for cost advantage.
• The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

• SHFE silver premium over COMEX silver has escalated to 7%, exacerbated by falling SHFE silver inventories, indicating a deepening shortage in China.
• Surging demand from China’s rapidly growing solar industry and renewable data centers is deepening the global silver deficit, now projected to continue at record levels for a fourth year.
• The strong bullish outlook for silver suggests that the bullishness in silver prices is likely to continue in the near-term.

• Sidara has submitted a fourth and final 230p/share cash proposal. Wood’s Board has changed tack and will grant due diligence. PUSU has been extended to 3 July.
• This proposal represents 39.4% premium, implied equity value of £1,591 million ($2,033 million) and implied EV of £2,983 million ($3,122 million), and (still good value) 6.4x EV/NTM Fwd EBITDA.
• The market is cautious (gross spread 12.5%). There’s potential for a “best & final” firm offer. However, if Sidara withdraws a significant sell-off in Wood’s shares is expected.

• Long Brookside Energy offers high-quality assets at a significant discount to its net present value and reserves value
• Investors are essentially getting 5,000 acres, 1,400 barrels of production, and 12 million barrels of reserves in the South SCOOP play in Oklahoma for a bargain
• Management is actively buying back shares to take advantage of the undervaluation, with plans for more buybacks in the future

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.

• 1Q24 production was 802 bbl/d with average realized price of US$82/bbl. This is in line with our expectations.
• Operating netbacks for the period stood at C$2.2 mm, also in line with our expectations
• Operating cashflow before changes in working capital was (C$0.37 mm).