Daily Brief Energy/Materials: Pacific Metals, Crude Oil, Exxon Mobil, Iron Ore, Hawkins Inc, Taiyo Holdings, Antero Midstream Corp, Chugoku Marine Paints, Serica Energy, ADX Energy Ltd and more

• Murakami’s entity, City Index Eleventh, and daughter reported a 5.40% stake in Pacific Metals (5541 JP). The shares were purchased from 27 May to 25 July.
• Murakami’s average buy-in price is JPY1,259 per share, an 11.1% discount to the last close price. Murakami has been a substantial shareholder twice before.
• Murakami’s previous dealings in Pacific Metals were a pump-and-dump where he built up around 8% stake, only to sell into the share price pop subsequently. Expect more of the same.  

• US crude inventories fell for the fifth consecutive week by 3.4 mb, exceeding the 1.6 mb decline expected by analysts. Gasoline stocks also decreased by 3.7 mb.
• As of the week ending 26/Jul, US natural gas inventories were up 8.4% YoY and 15.7% above the 5-year seasonal average.
• European oil majors beat Q2 profit estimates. BP’s Q2 underlying net profit beat estimates by 7.7%. Shell’s Q2 EPS beat estimates by 5.1%. 

• ExxonMobil anticipates a USD 1.1 billion to USD 1.5 billion dent on its Q2 earnings due to the industry-wide contraction in refining margins.
• Exxon Mobil anticipates the USD 300 million to USD 700 million negative impact on earnings from lower gas prices to be offset by gains from higher oil prices.
• Since acquiring Pioneer, Exxon more than doubled production to 1.3 mboepd from 2023. Full merger effects are expected in Q3.

• Champion Iron Ore, also known as Champ, is a premium producer in the iron ore sector with potential for increased attention over time.
• Adriatic Metals is ramping up production at their Vares silver-zinc polymetallic deposit in Bosnia, but facing challenges with cash flow and development rates.
• Cash flow issues, teething problems with mining services, and logistical challenges are hindering Adriatic’s ramp up, but they are on track to reach their nameplate by Q4.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• HWKN reported fiscal first quarter (June) where the water treatment business surpassed the industrial segment in sales and helped HWKN exceed our earnings estimate. 
• The water treatment business has grown through acquisition to a point where the segment has become a dominant portion of HWKN’s sales. 
• A higher earnings profile for HWKN and earnings continuing to grow in fiscals 2025 and 2026 leads us to raise our price target to $122 from $96.

• FY03/25 sales increased 29.3% YoY, with Electronics segment sales at JPY21.5bn (+36.6% YoY) and Medical and Pharmaceuticals at JPY8.3bn (+12.6% YoY).
• Operating profit grew 83.2% YoY, driven by yen depreciation and increased sales of high value-added white dry films.
• Full-year FY03/25 earnings forecasts revised: Sales JPY116.1bn (+10.8% YoY), Operating profit JPY20.6bn (+13.2% YoY), Net income JPY13.8bn (+59.5% YoY).

• Low natural gas prices benefit AM and AR due to their low-cost structure and hedging program
• AR has improved its financial position by reducing debt and improving liquidity
• AM’s partnership with AR provides stability and growth potential, making it an attractive investment option for investors looking for dividend yield and capital appreciation.

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.

• CMP’s Q1 FY03/25 sales were JPY29.1bn (+9.8% YoY), with notable increases in marine, industrial, and container paints.
• Operating profit was JPY3.4bn (+62.3% YoY), recurring profit JPY3.9bn (+61.9% YoY), and net income JPY4.9bn (+186.2% YoY).
• Profits increased in all regions, with sales up YoY in Japan, South Korea, and Southeast Asia, but down in Europe and the US.

• As expected, the rate of the Energy Profits Levy (EPL) will increase from 35% to 38% and the 29% investment allowance introduced with the EPL will be removed.
• The changes will be effective from 01 November 2024 and run until 31 March 2030.
• The government has also signalled that capital allowances (including first year allowances) in relation to the EPL will be reduced, but has said that the extent of this will be established after consultation with stakeholders and published in the 30 October fiscal event.

• Independent consultants have calculated that each of the three reservoirs encountered at Welchau (Reifling – 128 metres, Steinalm -118 metres and the Guttenstein – 111 metres) are hydrocarbon bearing with uncertainty on the hydrocarbon type.
• Laboratory work on the Steinalm reservoir has confirmed the full properties ofthe 43° API light sweet oil that was recovered in an MDT sample run in the Steinalm Formation.
• The vertical extent of this light oil in the Steinalm or in the shallower Reifling and deeper Guttenstein is uncertain and there is no clear evidence of a hydrocarbon-water contact in any of the reservoir formations based on the open hole wireline log data.