Daily Brief Energy/Materials: Pacific Metals, Pan African Resources, Sintana Energy , Tullow Oil PLC and more

• Yesterday after the close, activist Murakami-san’s entity City Index Eleventh reported a 5.76% position in beleaguered-now-smallcap ferro-nickel and nickel producer Pacific Metals (5541 JP). 
• The company continues to lose a LOT of money. It is cheap at 0.4x book. 
• But there are interesting things going on. And Murakami-san has a…. uh…. history here.

Pan African Resources’ (PAF’s) production update of 22 January revealed H124 production of 98,458oz gold, compared with prior guidance of 94,000–98,000oz, Edison’s expectation of 96,000oz and a figure of 92,307oz in H123. For the moment, we have left our financial forecasts for H124 unchanged, seeing roughly equally balanced upside and downside risks to our estimates pending actual results on 14 February. However, we note that the gold price is currently trading almost US$200/oz above our assumed H224 level.

• Galp Energia has announced a second discovery of light oil in deeper and high quality reservoir sands at the Mopane-1X exploration well on PEL83.
• This follows the light oil discovery in shallower sands announced earlier this month.
• Busy programme on the Shell’s block (south of PEL83) Shell operates PEL 39 that is located just south of PEL83.

• ADX Energy (ADX AU)C; target price of A$0.65 per share: Drilling rig on location of high impact well by the end of January – A rig is expected to be mobilised to the high impact Welchau-1 drilling location during the last week of January.
• The total vertical depth of the well is only 1,800 m with a dry hole cost estimated at ~EUR5.1 mm.
• BW Energy (BWE NO): BW Offshore sells interests in BW Energy to BW Group – BW Offshore will sell 58,111,461 (22.52%) shares in BW Energy to BW Group at a price of NOK32 per share, resulting in total proceeds ~US$176 mm.