Australis Oil & Gas Limited (ASX: ATS) is an ASX listed upstream oil and gas company engaged in the strategic development of its onshore oil and gas assets in the United States of America and Portugal. On March 12th, the company released its investor presentation highlighting significant events, financials and resource updates for the year ended December 31st, 2018.
Reportedly, the company increased its net leasehold position to 110,000 net acres within the Tuscaloosa Marine Shale (TMS) Core in Mississippi and Louisiana, which was independently assessed by Ryder Scott Company with an effective date of December 31st, 2018.
Operations began with an initial well program, and each future well has an NPV of ~USD 6.3 million at WTI of USD 60/bbl. The program is funded with USD 59 million cash pro forma as at December 31ST, 2018 for initial development and a positive field cash flow and debt facility of USD 75 million. Moreover, the TMS core acreage has several catalysts to be realised and generate great value on account of strong economics.
The company possess USD 75 million in the Macquarie Bank debt facility with USD 10 million drawn till date.
The presentation also entailed an overview of the company’s Portugal onshore concessions with significant development potential. Amongst various attractive features, there is a significant large in-place discovered and tested gas accumulation with 2C resources of 458 Bcf and limited exploration activity but an active hydrocarbon system. The company also offers a conducive fiscal regime with 0-9% royalties, a 21% corporate tax and no government intervention. Currently, the company is advancing negotiations with the Portuguese Authorities to obtain the imperative regulatory consents and thus begin the exploration and appraisal works.
In late February, the company issued the first tranche of 83.9 million ordinary fully paid shares to raise AUD 29.4 million (unconditional placement), as part of the previously announced placement drive to raise AUD 30.5 million before costs from institutional and sophisticated investors, at an issue price of AUD 0.35 per share. The second tranche of conditional placement (~ AUD 1.1 million) through issue of 3.1 million shares to Australis Chairman Jon Stewart and Non-Executive Director Alan Watson, will be executed in April 2019, upon shareholder approval at April’19 AGM.
According to the company’s financial summary, the gross sales volumes stood at 506,000 bbls, with a realised price of USD 68.80 amounting to the total sales revenue of USD 35 million. The net cash was recorded at USD 38 million with USD 10 million of debt. The operating activities resulted in cash inflows of USD 2.7 million primarily from receipts from customers. Similarly, there were net cash inflows of USD 38.6 million from financing activities. On the contrary, the extensive investments into the acquisition of exploration interests, property, plant, equipment, and oil & gas assets amounted to cash outflows of USD 19.31 million.
Australis Oil & Gas Limited has a market cap of AUD 225.4 million with ~ 980.02 million outstanding shares. By the close of the market trading hours on 12 March 2019, the ATS stock price was trending at AUD 0.225, down 2.17%, indicating an intra-day loss of AUD 0.005.
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