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Summary
- Oracle Power signed an MOU with the HH Private Office for mining activities in Africa.
- Oracle Power received payment from China National Coal Development Company Ltd as part of the application process for Letter of Intent.
- Coro Energy cancelled the sale of its entire Italian projects.
- Coro Energy reported resource upgrade at Make gas field.
ORCP was up by close to 4.14 percent, whereas Coro was down by about 0.87 percent from the previous closing price. Based on 1-year performance ORCP was up by about 127.81 percent, and CORO was down by about 84.80 percent (as on 10 August 2020 before the market close at 2:30 PM GMT+1). Let's skim through the recent financial and operational updates of the two companies.
Oracle Power PLC (LON:ORCP) – Raised £46.5 million through the issue of new shares and financing facility
Oracle Power PLC is a UK based power and natural resource company. The Company has an interest in the Thar Block VI project in Pakistan in which it is developing a coal resource and a power plant. The Company is included in the FTSE AIM All-Share index.
Recent Events
- On 29 July 2020, the Company announced that it had entered an agreement with The Office of His Highness Sheikh Ahmed Dalmook Al Maktoum (HH Private Office) for exploration activities in Africa. The HH Private Office has an interest in many projects in Africa, and the deal is for the projects in the Republic of Guinea. The HH Private Office holds 15.1 percent ownership in Oracle Power.
- On 14 July 2020, Oracle Power received pro-rata contribution related to an evaluation fee of Private Power and Infrastructure board. The Company received a payment of £28,263.72 from China National Coal Development Company Ltd as part of the application process for Letter of Intent (LOI). The LOI was for the development of a power plant and a coal-to-gas liquid facility at Thar Block VI Project.
- On 9 July 2020, Oracle Power raised £1.5 million through the subscription of new shares and £45.0 million through financing facility. The new shares were issued at 1.1324 pence per share.
FY2019 Annual results (ended 31 December 2019) as reported on 23 June 2020
During FY19, the Company made progress in the development of the Thar Block VI Project that was awarded the priority status under the China-Pakistan Economic Corridor (CPEC). Block VI in the Thar Desert, Pakistan is over an area of 66.1 km2 under a 30 years lease. The project cost is expected to be close to USD 6 billion to 8 billion and the expected IRR for coal project and power project is expected to be close to 16-18 percent and 15-18 percent, respectively for 30 years. In November 2019, HH Private Office invested £0.5 million in the Company and became a shareholder. Oracle Power has also entered into an agreement to develop 1,320 MW power plant, a lignite coal mine and a coal-to-gas liquid facility. In FY19, the operating loss widened to £1.0 million from £0.8 million a year ago. As on 31 December 2019, the Company had total assets of £5.5 million.
Project Milestone for Block VI project
(Source: Company Website)
Share Price Performance Analysis
1-Year Chart as on August-10-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Oracle Power PLC's shares were trading at GBX 0.729 up by about 4.14 percent from the last closing price (as on 10 August 2020 before the market close at 2:30 PM GMT+1). ORCP's 52-week High and Low were GBX 1.80 and GBX 0.19, respectively. The Company had a market capitalization of £13.86 million.
Business Outlook
The Company is focused on the Thar Block VI project in Pakistan, and it has made advancement on the project. The recent payment received from CNCDC would support the development of the Block VI project. Oracle would use the funds raised to support the working capital, and it wants to expand the international footprint through owning and developing natural resources worldwide and generating cash flow from the projects. Currently, the Company is operating project in Pakistan that is considered under the power and oil & gas group of the China-Pakistan Economic Corridor (CPEC) project.
Coro Energy PLC (LON:CORO) – Acquired 15 percent stake in Duyung PSC
Coro Energy PLC is a UK based company engaged in the production and development of the gas projects. The Company has production assets in Italy, and it has 15 percent direct interest in Duyung PSC, West Natuna Basin, Offshore Indonesia. Coro Energy is mainly focused on the South-East Asian assets, and it is included in the FTSE AIM All-Share index.
Recent Events
- On 31 July 2020, the Company terminated the sale and purchase agreement with Zenith Energy. In December 2019, Coro and Zenith entered into a deal in which Coro was supposed to dispose of its entire Italian assets; however, the transaction was conditional and required certain approvals and as the conditions did not meet the agreement was cancelled.
- On 17 June 2020, Coro Energy reached a settlement agreement with the Company's erstwhile CEO with regards to his termination. James Menzies, the ex-CEO of the Company, was terminated on 2 April 2020 following which he took some legal action. As a part of the deal, Coro would pay £132,000 to James Menzies, and he would waive off all the claims against the Company.
- On 26 May 2020, Coro Energy stated significant upgrade at Mako gas fields. The Company performed the independent resource audit after drilling in Q4 2019, and as per the recent audit report, the estimated recent resource increased by 79 percent compared to the previous estimate.
Resource Upgrade at Mako gas fields
(Source: Company Website)
Acquisition of Stake in Duyung PSC
Coro Energy acquired 15 percent direct stake in the Duyung PSC and the transaction completed in May 2020. Contrad Petroleum Limited holds 76.5 percent stake in Duyung PSC and Empyrean Energy holds 8.5 percent non-operated interest in Duyung PSC.
Share Price Performance Analysis
1-Year Chart as on August-10-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Coro Energy PLC's shares were trading at GBX 0.342 down by about 0.87 percent from the last closing price (as on 10 August 2020 before the market close at 2:30 PM GMT+1). CORO's 52-week High and Low were GBX 3.35 and GBX 0.275, respectively. The Company had a market capitalization of £2.76 million.
Business Outlook
Coro Energy believes that the future energy output would be dominated by gas, and the supply of gas in the hydrocarbon would have a greater share. The Company is focused on divesting the non-core assets in Italy. The successful resource upgrade at the Make gas field could have the upside potential for the net asset value (NAV).
