Post by
Proselenes on Jun 29, 2023 2:58am
Canaccord view on todays update
Canaccord Genuity view
Cascadura close to readiness, Royston sub-thrust test disappointment
Cascadura field facilities commissioning now expected to start "on or about 8 July". That is, we think, only marginally later than previous guidance, and it has essentially no impact on long-term field value and only very limited effect on near-term cash flow. Overall, given the complexity of the various elements of the development and considering that not all those operations were controlled by Touchstone, and bearing in mind some difficult recent weather conditions, that is a very satisfactory achievement.
The commissioning timetable should see first production, in our view, around mid July. Of far more importance than this small delay will be to see that commissioning proceeds smoothly with no significant issues and that the subsurface and infrastructure combine in the early months to deliver on-target performance.
Royston-1X well test disappointment in second sub-thrust test. The second test interval in the well - over three zones targeting a gross 80 ft interval in the Herrera sub-thrust sheet - produced light oil but at non-commercial rates. The company naturally hoped for better results, but now two sub-thrust tests in Royston-1X have failed to deliver positive results. We expect that will lead to a detailed analysis of the potential for this reservoir elsewhere on the Ortoire licence. We do not include any sub-thrust reservoir potential in our valuation. The next test zone will target a gross 106 ft interval within the intermediate sheet, the primary target for this well.
Webinar - 5 July, 1800 BST CEO Paul Baay will host a webinar just ahead of Cascadura field facilities commissioning.
Target price and rating We maintain our Speculative BUY rating and our risked NPV12.5-based target price of 160p.