Global Cross-Asset Energy Analyst, VAC Investments

Aaditya Chintalapati, CFA

Global Cross-Asset Energy Analyst

VAC Investments

Thematic (Sector/Industry)

<h2><strong><a href="https://www.smartkarma.com/entities/22869" target="_blank" data-smartkarma-citation="entities:22869:1">Crude Oil (CRUDE OIL COMDTY)</a></strong></h2><p>WTI ended the week at US$ 71.49/bbl while Brent ended at US$ 80.5/bbl, both c.4% lower for the week. This was driven by a surprisingly large build in US inventories for the week and limited disruption to GoM production infrastructure from Hurricane Michael. </p><p>However, a fresh diplomatic crisis over the weekend threatens to boost crude oil risk premia this week, with the US calling for an investigation over the disappearance of the journalist Jamal Khashoggi from the Saudi consulate in Istanbul, and Saudi Arabia in turn vowing to respond strongly in the event of US sanctions. Curiously, this crisis provides an opportunity for a detante between the US and Turkey, even as President Trump finds himself in the unenviable position of having to choose between lower oil prices and sending a strong message to Saudi Arabia.</p>

Crude Oil (CRUDE OIL COMDTY)WTI ended the week at US$ 71.49/bbl while Brent ended at US$ 80.5/bbl, both c.4% lower for the week. This was driven by a surprisingly large build in US inventories for the week and limited disruption to GoM production infrastructure from Hurricane Michael. However, a fresh diplomatic crisis over the weekend threatens to boost crude oil risk premia this week, with the US calling for an investigation over the disappearance of the journalist Jamal Khashoggi from the Saudi consulate in Istanbul, and Saudi Arabia in turn vowing to respond strongly in the event of US sanctions. Curiously, this crisis provides an opportunity for a detante between the US and Turkey, even as President Trump finds himself in the unenviable position of having to choose between lower oil prices and sending a strong message to Saudi Arabia.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/25655" target="_blank" data-smartkarma-citation="entities:25655:1">Frontera Energy (FEC CN)</a>'s Acorazado exploration well (Llanos 25, Colombia) discovered significant oil &amp; gas pay, albeit achieving lower than expected flow rates and uncertain commerciality. A successful well was expected to help address investor concern around Frontera's resource upside and production growth potential. However, given the mixed results at the well, we believe management will now need to focus on building a robust hopper of exploration prospects for 2019, via licensing rounds and acquisitions. Crucially, with the company generating c.US$300m of FCF per year, we believe Frontera is well placed for accretive resource acquisitions in the region. We see c.50% upside to our C$27/share price target, which is based on our Base Case NAV.</p>

Frontera Energy (FEC CN)'s Acorazado exploration well (Llanos 25, Colombia) discovered significant oil &amp; gas pay, albeit achieving lower than expected flow rates and uncertain commerciality. A successful well was expected to help address investor concern around Frontera's resource upside and production growth potential. However, given the mixed results at the well, we believe management will now need to focus on building a robust hopper of exploration prospects for 2019, via licensing rounds and acquisitions. Crucially, with the company generating c.US$300m of FCF per year, we believe Frontera is well placed for accretive resource acquisitions in the region. We see c.50% upside to our C$27/share price target, which is based on our Base Case NAV.

Frontera Energy (FEC CN): Mixed Results at Acorazado Reiterate Investor Concerns

Canada

Frontera Energy Corporation provides oilfield services. The Company explores, develops, and produces crude oil and natural gas. Frontera Energy serves customers worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Frontera Energy (FEC CN)

Global E&Ps: Energy Weekly Vol. 26

Crude Oil (CRUDE OIL COMDTY)WTI ended the week at US$ 71.49/bbl while Brent ended at US$ 80.5/bbl, both c.4% lower for the week. This was driven by...

Aaditya Chintalapati, CFA

Frontera Energy (FEC CN): Mixed Results at Acorazado Reiterate Investor Concerns

Frontera Energy (FEC CN)'s Acorazado exploration well (Llanos 25, Colombia) discovered significant oil & gas pay, albeit achieving lower than...

Aaditya Chintalapati, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)