||COM SHS USD0.04 (DI)
||EPS - Basic
||Market Cap (m)
|Oil & Gas Producers
Real-Time news about Coastal Eng (London Stock Exchange): 0 recent articles
|dukedosh: FE note just out - header updated.
We maintain our Outperform recommendation on Coastal Energy with a target price slightly reduced from C$26.40/£17.70 to
C$25.00/£15.64 following the publication of the Company's 3Q13 results.
Results of fracking at Bua Ban Main have been disappointing so far, with two wells out of four watering out. Production start-up in Malaysia is
imminent with two out of three wells already drilled. The deliverability of the wells and the exact start-up date will be important in order for
the company to meet its exit rate guidance.
The price of the shares of the Company has dropped over 15% since Thursday week which appears to us to be an overreaction, particularly
given that we have reduced our Risked NAV by only 6%. The shares trade 15% below our Core NAV and our Risked NAV represents over 60%
premium to the current share price. We also note that the Company's buyback programme could start again soon. The reported potential
cash offer for Coastal of C$20-22.00 per share (30-40% above the current share price) suggests that the shares are cheap.|
|morti1: I agree. The oil spill is not linked in any way to Coastal and the share price should in essence not be affected. The share price is simply drifting because since the last report with missed estimates etc there is not any news as yet to positively shift the share price. Progress in production has simply been held back and it ought to be back on track in due course, which will then be eventually reflected in the production and ultimately the share price. Long term I would think the company will be fine.|
|rivaldo: This is Goldman Sachs' June E&P summary market report - they upgrade CEO to Buy from Neutral, with an 1843p target (almost double the current price) - see p.21:
"Coastal (CEO.L): Opportunity to buy inexpensive basin explorer; Buy (from Neutral)
Source of opportunity
Coastal Energy's performance has been weak ytd (-7% vs. flat performance for our larger cap universe) driven in our view by some negative exploration news around the Bua Ban Terrace A-01 and the Songkhla M wells as well as disappointing 1Q production numbers that make us cautious on Coastal's ability to hit full-year production guidance. We lower our production numbers and reflect the exploration disappointment but, despite this, we believe that the share price pull back offers an opportunity to buy into a cash generative basin exploration story which is well supported by 2P reserves, with debt + production worth more than 100% of the share price in our view. We believe that exploration activity should continue at a strong pace in 2013, with further wells into the Bua Ban Terrace and Benjarong South wells of particular importance in our view the company's offshore Thailand exploration is highly attractive owing to the low cost of wells and the quick lead times from discovery to production.
This exploration could be material and we believe drilling in 2013 could offer an additional 43% upside to the current share price, and drilling beyond that offering further re-rating potential of almost 200%. We also believe that the recently shot 3D seismic could also generate additional prospects around the end of the basin; analogues in Malaysia and Indonesia suggest that these could be material. The company will remain
attractive to potential purchasers, in our view; we note recent press reports citing interest from Petronas at $23 per share.
We believe that despite disappointing production numbers in 1Q13, production should continue to rise in the company's offshore assets, and that commencement of operations in Malaysia towards the end of 2013 should highlight this new area's potential for additional production and cash generation. We also believe that exploration should remain a key part of the story, with results from the 3D seismic due shortly. We believe that in the event of total de-risking, exploration for the remainder of the year could result in 43% uplift to the current share price with significant further potential to follow.
Our 12-month SOTP-based target price is 1843p (from 1759p) and is calculated using an oil price of US$100/bl. Discoveries and exploration assets are valued using a risked NPV/bl approach. We assume a longer dated time horizon for exploration in the company's offshore Thai acreage owing to the relatively de-risked, basin-led nature of the exploration. We include an 10% weighting for M&A in our target price.
Short term downside risks are further production and exploration disappointments offshore Thailand and delays or problems in ramping up production in Malaysia."|
|rivaldo: Having sold my stock at 1250p and just below I completed my buying back this morning and have ended up with almost 40% more shares than I had previously. It's rare that a "cunning plan" ends up as well as that!
Morti1, it means that the forthcoming share buybacks will provide a floor for the stock at around the current price as the share price will be supported.
Given CEO's illiquidity any decent buyback programme should imo lift the share price very nicely indeed. Hopefully the blackout before the programme commences will be lifted any day now.|
|dukedosh: * It looks like Coastal is beginning to behave like a major and only report to the market every quarter.
* When the market gets used to this reporting period, some of the volatility is taken out of share price movements. Not a bad thing for longs.
* FWIW, I've been switching all my trade funds into CEO as this share price is so cheap, it's ridiculous.
This courtesy of Belt from iv.
Showing not only in cen board activity and frustration but now in the share price. CEN has elected to wait to deliver a comprehensive news release - likely in a few weeks when they release their 2012 YE financials and reserve report at the end of the month...it should be accompanied by a full operations update. Both rigs have been churning since the last update - one at BBNB (both horizontals and verticals) and the other at Songhkla. They are now drilling Songhkla M which is the added upcoming catalyst that could be significant if it is a discovery...I expect we should get the initial log results with the update. The institutions are having some fun with the average retailer knowing they are getting nervous with the lag in news and others being victims of margin calls. We've seen this all before all too often - in this stock and in others. I, for one, was loading up today under $19. I expect that as Song M gets underway and we get closer to the update the share price will begin its usual march higher. This latest drop was on very little volume - I've placed my bet and I believe some of us will be looking at today's prices as a gift in the not too distant future. Never know what the overall macro situation will do but CEN is bringing in lots of cash and has been developing two prolific basins for a few months now. Songhkla M is primarily a miocene prospect - the recently acquired 3D seismic gave them reason to bump it up in the drill queue. No guarantees on anything in this crazy market and could get bumpy still, but at $19 this one looks to me like a very good bet here for a short term gain.|
|melf: More from Belt:
Is it just a coincidence but share price does tend to head north after a Belt post???
Re: 52 days since news
The stock is currently trading at $21.34. I understand that folks want an update but it's difficult to be too impatient or frustrated when the stock is trading not too far from its all time high. Real frustration really comes with delays and a faltering share price. Clearly the institutions are not too worried about an interval between news releases. The news will come when the news is ready. The company is drilling a series of development wells and has obviously chosen to bundle this news in one bigger release than update on a well to well basis. I'm surprised with the delays too but I think this is wise with 2 rigs going to do some bundling and will likely have a more positive impact on the share price if the news is altogether positive. I can't imagine much longer now but I expected it already. But again when I look at the current share price it's hard to get too upset or demanding....
|markt: ...fingers crossed that Dow Industrials will finally grind up above 13000 and stay there......been bouncing around 13000 for a few days now....but the up trend seems to still be intact....
which, hopefully may generate a good mood for markets...won't harm CEO share price hopefully...including for UK stocks (unless there is more bad news from Euroland)|
|markt: Recent post on main board that future use of frac technology could have major impact on CEO share price
frac, wat's at ?....
Here's a link to Wikipedia .....perhaps useful link for other non-oilies like me learning about the oil sector (I post here to avoid clogging up the main thread with this super basic stuff).
Looks like hydraulic fracturing....fracturing underground structures in order to increase the % of the oil present that can be extracted...and a large part of the current CEO share price is based on the perceived value of extractable oil...which is only a % of the calculated oil present (perhaps 25-30%).|
|markt: Thanks for anyone that has replied to my questions.....as a non-oily I know very little...(maybe I won't try to learn too much since such a big subject imho....I only see the share price going up from here...and I only just bt. so no need to know much till X weeks/months in future if consider to sell)
.....I know nothing about oil (this is my first oil share ever).....but I think this share price is only going higher....the share price rocketing is as if they have struck oil.....and they have !!
(there is a risk of a fall back after such a run up....but if happens imho it will only be temporary before returning upwards)
(and lots of insider buys with decent size value)
My own analysis (for what its worth, noting I know 0 about oil !) is that
-1) share price is supported by the existing reserves, AND by profit from "current" extraction rates. share price seems highly supported from 2 factors, which is perhaps an unusual benefit imho
- profit from oil sales pays costs of new exploration drilling and if find more oil then share price should go up...if don't then it looks imho that share price has a lot of support from 1)
The recent news of new discoveries going into high production rates (high production of last annual report average daily production) won't imho be fully known to all oil investors imho...only existed for a few days.....hopefully creating more buyers/interest over following weeks/months....
and then the news will appear in the accounts accounts....
and then at the AGM !
(if the news appeared in Q1 then it would not have quite the same impact imho)
...the co. seems keen to publicise the news to the world ...eg. presentations in London on Monday...with 2 other cos...(perhaps was pencilled in for weeks/months ?).....if the board and certain people own 70% of the shares then they have a personal interest in publicising any good news, so I would expect more presentations to the oil sector in coming months and perhaps new info/presentations on the co. website.|
|rivaldo: Bizarre imo that the CEO share price hasn't moved up more given the rise in the oil price to $116 or thereabouts. That's the markets for you. Give it time!|
Coastal Eng share price data is direct from the London Stock Exchange