Daily Brief Energy/Materials: Korea Zinc, Glencore Plc, Halliburton Co, Natural Gas, Sanil Electric, Crude Oil, Serica Energy, Deep Yellow , Infinity Natural Resources, Santacruz Silver Mining and more

• On 21 January, there was an important legal court decision to disallow the appointment of directors using the cumulative voting system at the Korea Zinc’s EGM on 23 January.
• This legal decision is likely to favor MBK/Young Poong alliance in the control of Korea Zinc. The market increasingly favors the likelihood of MBK/Young Poong alliance winning this proxy battle.
• Therefore, the chance of a further M&A battle has been reduced which is likely to further decline in the share price of Korea Zinc. 

• Rumors of a potential merger between Glencore and Rio Tinto, which would be the largest mining M&A deal ever
• Talks were reported to have occurred in the second half of last year but are not currently active
• Both companies have London listings and did not comment on the rumors, indicating a potential window of no talking due to UK takeover rules

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• Halliburton will report its Q4 earnings on 22/Jan, with revenue and EPS projected to fall sequentially and annually. For fiscal 2024, revenue and net profit are expected to drop.
• Halliburton’s OI PCR at 1.21, signalling bearish sentiment, with a 67% IV percentile indicating moderately high volatility.
• For the 24/Jan expiry, Halliburton’s OI shows calls concentrated at strikes 28.5, 29, and 30. Puts dominate at 26, 27, and 27.5. Put OI is higher at key levels.

• For the week ending 17/Jan, U.S. natural gas prices declined 1% amid volatility driven by shifting weather forecasts, increasing LNG exports, and falling inventories.
• Henry Hub Put/Call volume ratio fell to 1.18 from 1.29 (10/Jan) the previous week as call volumes dropped by 5.1% WoW, while put volumes declined by 13.5%. 
• Henry Hub OI PCR stayed put at 0.92 from last week. Call OI inched up by 6.9% WoW, while put OI increased by 7.4%.

• Sanil Electric (062040 KS) listed in Korea on 29th July 2024 after raising US$193m. Its six-month lockup will expire on 29th Jan 2025.
• Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• WTI futures rose 1.7% for the week ending 17/Jan, driven by healthy U.S. economic data, falling crude inventories, and supply concerns.
• WTI options Put/Call volume ratio surged to 1.28 from 0.83 (10/Jan) last week, as call volume fell by 70.7% WoW while put volume decreased by 54.7%.  
• WTI OI PCR rose to 1.00 from 0.94 last week. Call OI fell by 11.7% WoW, while put OI declined by 6.4%.

• FY24 production of 34.6 mboe/d had been reported previously.
• The GE-05 well (Serica WI: 100%) has been brought into production at a stable rate of 6 mbbl/d after having flowed 9 mbbl/d on test.
• This exceeds our estimate of 3 mbbl/d.

• Deep Yellow Limited(DYLLF) Company Sponsored Research Report

• Oil & Natural Gas company focusing on the Appalachian Basin sets terms for its IPO
• The company is offering 13.25mm shares at a range of $18.00-$21.00 and will debut on Friday, January 31
• Total oil, natural gas and NGL net revenues for the nine months ended September 30, 2024 increased by $100.6 million, or 114%

• Santacruz is a multi-asset Canadian mining company focused on silver with assets in Latin America.
• In April, the Company refinanced its debt with Glencore, reducing net debt from $176M in Q4/23 to $46M in Q3/24.
• SCZ is now printing cash, generating $30M in OCF in Q3 and is on pace to generate $79M in 2024E.