Oil started flowing last year from Valiant Petroleum’s two Don fields, West Don and Don Southwest, in the northern North Sea, so the first-half results give a clearer picture of prospects.
With the Phase I development at Don now finished, the field produced an average 6,033 barrels a day although output from West Don was slightly below target due to technical hitches; and it’s started piping the oil via the Thistle platform rather than shipping it out by tanker. So turnover and profits soared, while the apparent drop in the headline earnings numbers is explained by the large tax credit received last year.
Meanwhile there’s an active development programme to stimulate newsflow. This includes results from two wells being drilled, one on the Viola North field, and it will start appraisal drilling at the recently announced discovery at the Tybalt field. A number of wells are planned for next year, and Valiant is looking to extend its debt facilities and for new opportunities via the 26th UK licensing round and acquisitions.
Analysts’ forecasts of estimated net asset value (NAV) have been cut back to reflect the lack of visibility as yet on Tybalt’s reserves, and Cannacord now puts NAV at 815p, which reflects core NAV on existing production forecasts of 662p, assuming an oil price of $70 (£45.29) a barrel, plus a further 153p on present estimates for Tybalt.
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VALIANT PETROLEUM (VPP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 674p | MARKET VALUE: | £264m | |
| TOUCH: | 670-678p | 12-MONTH HIGH: | 729p | LOW: 508p |
| DIVIDEND YIELD: | Nil | PE RATIO: | 28 | |
| NET ASSET VALUE: | 415p* | NET DEBT: | 40% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 5.57 | 1.19 | 49.6 | nil |
| 2010 | 64.5 | 23.1 | 31.8 | nil |
| % change | +1,059 | +1,841 | -36 | - |
