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Summary
- Deltic Energy announced an enhanced prospect of resource estimate at Selene project.
- Cluff Natural Resources PLC’s name changed to Deltic Energy PLC in June 2020.
- Clontarf Energy plans to start work at Tano 2A in Ghana after petroleum agreement is signed.
- Clontarf Energy submitted a proposal for lithium project in Bolivia.
Given the recent operational and financial events at two companies, we would discuss Deltic Energy PLC (LON:DELT) & Clontarf Energy PLC (LON:CLON). DELT is an energy stock, and CLON is a basic materials stock. Based on the 1-year performance DELT was down by about 36.27 percent, and CLON was up by about 58.75 percent. DELT and CLON were down by about 5.26 percent and 4.15 percent from the last closing price (as on 12 August 2020, before the market close at 8.00 AM GMT+1).
Deltic Energy PLC (LON:DELT) – No debt on the balance sheet
Deltic Energy PLC is a UK based natural resource development company that is focused on projects based in Southern and Central North Sea. The Company changed the name from Cluff Natural Resources PLC to Deltic Energy PLC in June 2020. Deltic is included in the FTSE AIM All-Share index.
Recent Events
- On 11 August 2020, the Company announced the increase in resource estimate at the Selene project. The appraisal in gas volume is much higher than the previous estimate. Deltic and Shell team performed the technical survey that involved reprocessing 3-D seismic and technological depth conversion. There is a further upside potential of gas at the project. Selene is a large undrilled Leman Sandstone structure, and the Company is performing the work at the project along with Shell.
Revised Gas Initially in Place (GIIP) data at Selene
(Source: Company Website)
- As on 10 August 2020, Reabold Resources PLC cancelled the all-share offer for Deltic Energy. On 15 July 2020, Reabold announced a potential all-share offer for issued capital of Deltic Energy. However, Deltics’ board rejected the offer of Reabold on 16 July 2020.
- As on 25 June 2020, Cluff Natural Resources PLC’s name was changed to Deltic Energy PLC.
- As on 16 June 2020, the Company granted options of close to 6.5 million ordinary shares of 0.5 pence. The options have an exercise price of 1.55 pence per share and are related to the employment contracts.
FY2019 results (ended 31 December 2019) as reported on 16 April 2020
During FY19, the Company achieved some key milestones such as entering into two-farmout agreements with Shell. The two farm-out deals were for Pensacola prospect and Selene prospect. Deltic has a 50 percent interest in the Selene prospect. The Company also issued equity to raise close to £15 million in FY19. The Company is confident about the financial and operational position as it is not directly exposed to oil prices and does not have any debt on the balance sheet. As on 31 March 2020, Deltic had cash of £13.2 million.
Share Price Performance
1-Year Chart as on August-12-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Deltic Energy PLC’s shares were down by close to 5.26 percent and trading at GBX 0.90 per share (as on 12 August 2020, before the market close at 8.00 AM GMT+1). DELT’s 52-week High and Low were GBX 1.69 and GBX 0.55, respectively. Deltic Energy had a market capitalization of £13.35 million.
Business Outlook
The Company is optimistic over the new resource estimates at the Serene license and expects it to have further upside potential for the resource. Deltic Energy is planning to drill well at the project from 2022. It is optimistic about the farm-out arrangements and on-going partnership with Shell. It is also seeking a farm-out deal for Dewar. The Company stated it is financially equipped to perform the well exploration at the Pensacola and Selene. It also has working capital to sustain until the end of 2021.
Clontarf Energy PLC (LON:CLON) - No significant impact on operations due to the pandemic
Clontarf Energy PLC is a UK based oil & gas exploration company that has an interest in projects in Ghana and Bolivia. It has exposure to lithium projects in Bolivia and hydrocarbon projects in Ghana. Company has a 60 percent stake in the Tano 2A concession offshore Ghana. Clontarf Energy is included in the FTSE AIM All-Share index.
FY2019 results (ended 31 December 2019) as reported on 26 May 2020
In FY19, the Company reported a loss before tax of £0.30 million that was £0.35 million in FY18. The loss per share during the reported period was 0.04 pence. The net cash outflow in FY19 was £0.20 million. As on 31 December 2019, Clontarf had total assets of £1.15 million that included cash of £0.30 million. Clontarf had a net liability of £0.08 million. The pandemic did not have a significant impact on the operations of the Company; however, some engagements related to projects in Ghana, Europe and Bolivia were postponed as travel restrictions were imposed.
Corporate update as reported on 3 April 2020
The Company is planning to start work at the Tano 2A in Ghana after the petroleum agreement is ratified and signed. The Company is also seeking funding to start the work programme at the project. The Company’s partners in the Tano 2A project have helped to overcome the financial constraints related to the project amid the low oil prices. In Bolivia, the Company has submitted the proposal for medium-sized salt lakes that have good lithium grade with low magnesium impurity. The Company is in discussion with the management of the National Lithium Company to align the work at the project.
Share Price Performance
1-Year Chart as on August-12-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Clontarf Energy PLC’s shares were down by close to 4.15 percent and trading at GBX 0.53 per share (as on 12 August 2020, before the market close at 8.00 AM GMT+1). CLON’s 52-week High and Low were GBX 0.21 and GBX 1.98, respectively. Clontarf Energy had a market capitalization of £3.80 million.
Business Outlook
The Company is confident about the demand for lithium, a battery metal, and has a vast application in the electric vehicle industry. The Company is hopeful of the progress of the projects in Bolivia and Ghana, and it is engaged in active discussion with the relevant authorizes in both countries. The Company is not revenue-generating, and it is highly dependent on the external funding sources to raise capital.
