In today’s briefing:
- SK Innovation’s Merger with SK E&S: Bad Timing for SK Innovation and Higher Risks from RCPS
- Premier Energies Pre-IPO – Still Ramping up but Already Profitable
- Mount Gibson (MGX AU): Q4 Production Report And Guidance Disappointing, But Mkt Cap = Net Cash
- [ETP 29/2024] Oil Rebounds on Inventory Drop; Energy Majors’ Targets Cut
- Globe Metals & Mining Ltd – Economics Improved, Progressing to DFS
- W&T Offshore, Inc. – Estimate Update
SK Innovation’s Merger with SK E&S: Bad Timing for SK Innovation and Higher Risks from RCPS
- On 17 July, SK Innovation (096770 KS) officially announced a merger with SK E&S. The merger ratio between SK Innovation and SK E&S has been set at 1 to 1.1917417.
- We believe this is the wrong timing for this merger from SK Innovation’s point of view. SK Innovation is trading at near three year lows.
- This merger is likely to generate backlash from KKR which holds SK E&S redeemable convertible preferred stock (RCPS) worth 3.1 trillion won.
Premier Energies Pre-IPO – Still Ramping up but Already Profitable
- Premier Energies Limited (0377949D IN) is looking to raise US$300m in its upcoming India IPO. It is a manufacturer of solar photovoltaic (PV) cells, and solar modules.
- It also executes engineering, procurement, and construction (EPC) projects and provides follow-up operation and maintenance (O&M) services.
- In this note, we talk about the company’s historical performance.
Mount Gibson (MGX AU): Q4 Production Report And Guidance Disappointing, But Mkt Cap = Net Cash
- Mount Gibson Iron (MGX AU) reported a disappointing Q4 FY24 production report. Volumes were inline, but provisional pricing impacts of ~20% brought a quarterly cash outflow of one mn AUD.
- Volume guidance for FY25 was light at 2.7-3 mn tons (vs. 4.1 mn in FY24). Net Cash rose to 436 mn AUD (excluding Fenix Investment), almost equaling the market cap.
- FY24 results are due on 21st August 2024, when the board will recommend a dividend. Net cash and future cash flows should support the share price in the long run.
[ETP 29/2024] Oil Rebounds on Inventory Drop; Energy Majors’ Targets Cut
- US crude oil inventories fell by 4.9 million barrels in the week ending 12/Jul, marking the third consecutive weekly decline.
- As of 12/Jul, US natural gas inventories were up 8.4% YoY and 16.9% above the 5-year seasonal average.
- UBS expects Chevron’s Q2 earnings to fall short of expectations due to LNG project downtime and lower international refining margins.
Globe Metals & Mining Ltd – Economics Improved, Progressing to DFS
- RaaS Research Group has produced an update report on niobium-focused Globe Metals & Mining (ASX:GBE).
- GBE has continued metallurgical work for their chlorination process with results (20 March 2024) demonstrating the ability of the process to produce high purity Nb205 at a lab scale.
- The results showed an extraction and separation rate of 99% for niobium and tantalum as well as 94% for rare earth elements (REEs).
W&T Offshore, Inc. – Estimate Update
- We are updating our 2Q24 estimates to reflect actual oil and natural gas prices.
- Our reference oil price averaged $80.66 during 2Q24, and our reference natural gas price averaged $2.33/MMBtu.
- For 2Q24, we estimate total revenue of $139.1 million based on estimated average production of ~35.0 MBOE/d, including ~14.1 MB/d of oil.
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