In today’s briefing:
- [Pre Earnings Options Flash] Occidental’s OI PCR Implies Neutral Sentiment Amid High Volatility
- Magnera: Investment Case is On Track
- Poor OEM Tire Sales, Robust Replacement In The EU In 2024
- [ETP 2025/07] Rising U.S. Crude Inventories Weigh on WTI, Henry Hub Soars on Frosty Forecasts
- Nagaoka International (6239 JP): 1H FY06/25 flash update
- OPTT US: $2 Million PowerBuoy PO in Latin America Advances Path to Break-Even in 4QCY25
- ADX Energy (ASX: ADX): New acreage in Austria increases prospect inventory with a focus on low risk
- Valeura Energy (TSX: VLE): 245% Reserves Replacement Ratio. 2C Resources ~x2.5. Decommissioning down by 35%
- Criterium Energy Ltd (TSX-V: CEQ): Gas development capex only US$3-5 mm. FY25 debt repayment reduced by US$2 mm.
- Hakudo Co Ltd (7637 JP): Q3 FY03/25 flash update
[Pre Earnings Options Flash] Occidental’s OI PCR Implies Neutral Sentiment Amid High Volatility
- Occidental is to report its Q4 earnings on 18/Feb and analysts project its revenue and EPS to fall by 2.6% YoY and 9.5%, respectively.
- As of 13/Feb, Occidental’s implied volatility (IV) stands at 32.89%, with an IV rank of 76.4% and an IV percentile of 91%.
- Occidental’s OI by strike for the 21/Feb expiry shows calls concentrated at strikes 50, 52.5, and 55, while puts dominate at 45 and 47.5.
Magnera: Investment Case is On Track
- When I originally recommended Magnera (MAGN) in November, my investment thesis could be summarized as follows: “trough valuation on trough earnings.”
- And after the company reported earnings, that thesis remains intact.
- In its most recent quarter Magnera reported y/y sales and EBITDA growth, suggesting that results have troughed.
Poor OEM Tire Sales, Robust Replacement In The EU In 2024
- Sharp decline in heavy OEM commercial vehicle tire production in 2024
- China PCLT tire import volume into EU up 50% since 2019
- EU extends tariffs on Chinese truck and bus tires
[ETP 2025/07] Rising U.S. Crude Inventories Weigh on WTI, Henry Hub Soars on Frosty Forecasts
- For the week ending 07/Feb, US crude inventories increased by 4.1m barrels, exceeding expectations of a 2.4m barrel build. Gasoline stockpiles surprisingly fell, while distillate stocks unexpectedly rose.
- US natural gas inventories fell by 100 Bcf for the week ending 07/Feb, beating analyst expectations of a 90 Bcf drawdown. Inventories are 2.8% below the 5-year seasonal average.
- BP’s Q4 net profit fell 48.5% QoQ and missed estimates by 2.5% due to weak refining margins. Chevron plans to trim workforce by 20% to cut costs.
Nagaoka International (6239 JP): 1H FY06/25 flash update
- In 1H FY06/25, revenue was JPY3.6bn (+2.4% YoY), with operating profit at JPY494mn (-17.0% YoY).
- Water-related business revenue reached JPY983mn (+8.6% YoY), with a narrowed segment loss of JPY24mn from JPY39mn.
- Full-year FY06/25 forecast: revenue JPY11.2bn (+17.8% YoY), operating profit JPY1.9bn (+10.0% YoY), net income JPY1.2bn.
OPTT US: $2 Million PowerBuoy PO in Latin America Advances Path to Break-Even in 4QCY25
- OPTT’s focus on commercialization continues to gain traction as it inked a $2 million deal in Latin America for its PowerBuoy product.
- The details of the deal are scant at this point, but it’s clear that this represents significant traction in the firm’s sales efforts in the region.
- Total revenue in 2Q25 was $2.4 million, which represented a 172% Y/Y increase. So, this deal represents a meaningful revenue number.
ADX Energy (ASX: ADX): New acreage in Austria increases prospect inventory with a focus on low risk
- ADX’s acreage in Austria has been modified to include additional near-term, low-risk gas prospects, as well as high-impact, higher-risk opportunities.
- One focus of the 2025 program is to drill shallow, low-risk, high initial production gas prospects that can be rapidly put into production.
- ADX has more than tripled the number of these prospects within its revised acreage positions at ADX-AT-I and ADX-AT-II, holding 100% WI in the new prospects.
Valeura Energy (TSX: VLE): 245% Reserves Replacement Ratio. 2C Resources ~x2.5. Decommissioning down by 35%
- • YE24 2P reserves were estimated at 50 mmbbl (up from 38 mmbbl at YE23).
- This represents a Reserves Replacement Ratio of 245%, significantly above our expectations of ~100%.
- • The reserves revision reflects (1) upward revision of STOIIP estimates (the high achieved recovery factors suggest that the volumes initially in place had been underestimated), (ii), positive drilling results which reflect Valeura’s application of advanced drilling and completion technologies including geosteering and inflow control and (iii) better well performance with lower decline rates than initially estimated.
Criterium Energy Ltd (TSX-V: CEQ): Gas development capex only US$3-5 mm. FY25 debt repayment reduced by US$2 mm.
- FY25 oil production is expected to be 1,000-1,200 bbl/d with 8-12 work-overs costing US$0.04-0.07 mm per well (total of US$0.32-US$0.84 mm).
- This in line with our expectations (1,150 bbl/d production and ~US$1 mm capex).
- The capex requirement to reach first gas in 1Q26 at SE MGH based on modular LNG is now estimated at US$3-5 mm (we assumed US$5 mm).
Hakudo Co Ltd (7637 JP): Q3 FY03/25 flash update
- Revenue increased by 16.8% YoY, driven by higher product prices and increased sales volumes in the semiconductor industry.
- Operating profit rose by 17.2% YoY, supported by higher sales and an expanded inventory valuation gain from raw material price fluctuations.
- Full-year FY03/25 forecast remains unchanged, reflecting uncertainties in interest rates, exchange rates, and raw material market conditions.
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