Daily Brief Energy/Materials: Sino Oil And Gas Holdings, Crude Oil, Alkane Resources, Devon Energy, Ecolab Inc and more

• Troubled coalbed methane play Sino Oil And Gas Holdings (702 HK) is currently suspended pursuant to the Hong Kong Code on Takeovers and Mergers. 
• Sino Oil is burdened with a large convertible note and a winding-up petition.  Its auditor has disclaimed accounts since 2017 over its ability to continue as a going concern.
• Jiangxi Jovo Energy (605090 CH) is interested in taking more than 50% of Sino Oil (via new shares), but less than 75%. Sino Oil is up >100% in the past month. 

• WTI’s bearish flat/triangle is setting up to break lower and a harbinger of weaker growth in coming months amid a stronger USD.
• Bearish oil also gels with our stronger dollar and weaker demand view. It will also bring energy shares back to earth.
• New low targets at 69 and 65 then review for a tactical recovery attempt.

As expected, the NSW Minister for Planning has approved Alkane’s Tomingley Gold Extension Project, allowing both open-cut mining at the Roswell and San Antonio deposits (including underground mining at the former) and extending the mine life to 2032. The approval accepts a processing rate of up to 1.75Mtpa, with underground mining due to commence at Roswell before the end of CY23. Financing has been secured via A$50m of debt funding from Macquarie Bank, together with 100koz of gold hedging at a weighted average price of A$2,825/oz (US$1,928/oz).

• Devon Energy delivered a mixed performance in the last quarter of 2022.
• The company managed to surpass the revenue expectations of Wall Street but its earnings were well below par.
• We give Devon Energy Corporation a ‘Buy’ rating with a revised target price.

• Ecolab delivered a mixed performance in the fourth quarter.
• Organic sales increased by 12%, and sector-wise growth was strong but the company failed to meet the revenue expectations of Wall Street.
• Healthcare & Life Sciences resumed growth and delivered 7% organic growth.