• In Brief:
o Union Jack Oil*** (LON:UJO– 0.14p) – Fiskerton Takes UJO Forwards
o Aminex (LON:AEX– 3.5p) – Dented, Not Damaged, But Forward Plan is Needed
• Union Jack Oil*** ((LON:UJO – 0.14p) – Fiskerton Takes Company Forwards: Today’s acquisition of 20% interest in Fiskerton Airfield continues the Company’s deliberate march up the E&P value chain, which by focusing on nearer-term cash generation, brings the Company closer to the point of sustainability. We will wait for the results of the reinterpretation of the seismic before fully valuing the acquisition’s contribution to the Company’s value. However, post the completion of the workovers, the estimated gross production of 40bpd from the field adds $0.3mm net to the Company’s interest, based on a per daily flowing barrel basis. Our valuation stands at $6.9mm (0.13p – Core) to $38.1mm (0.73p – Full).
• Aminex (LON:AEX– 3.5p) – Dented, Not Damaged, But Forward Plan is Needed: Today’s news that the production rate at Kiliwani North has fallen away so dramatically, so early in its flow lifecycle will be embarrassment for the petroleum engineering team at Aminex. However, it must be stressed that production rarely proceeds exactly according to one single planned outcome, but within a “production envelope.” What is required moving forwards is a revision and a reconciliation as to why this has happened and, more importantly, what needs to be done going forwards to ensure that this is not repeated. Currently, this is a dent to the management’s credibility, but it is solvable, as long as the reasons are disclosed and reconciled with the data/thinking that existed before the plant was commissioned.