Daily Brief Energy/Materials: Sumitomo Chemical, Bluescope Steel, Expand Energy, Ocean Power Technologies, Crude Oil, D3 Energy, GCC SAB de CV, Major Drilling Group Intl, Cardinal Resources, BP PLC and more

• For a change of pace, this insight briefly canvasses a clutch of Holdco’s trading at extreme levels, in both “set-up” and “unwind” territory.
• Preceding the chart/table-heavy insight are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Context: The Bluescope Steel (BSL AU) vs. Sims Metal (SGM AU) price-ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Going long Bluescope (BSL AU) and short Sims (SGM AU) targets a 6% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• Expand Energy’s latest quarterly results highlight both positive strides and challenges within the company’s operations and strategic outlook.
• The company has pursued capital efficiency, managing to reduce costs significantly while increasing production, particularly in the Haynesville region.
• Expand Energy has demonstrated an impressive cost reduction in well expenses by over 25% and outperformed peers with year-to-date costs 30% lower, thanks to optimized development and completion designs.

• Ocean Power Technologies, Inc. (NYSE American: OPTT) delivers an extensive range of ocean-intelligence solutions using advanced autonomous systems and specialized software. 
• The company has transformed from a wave energy developer into an integrated provider of ocean intelligence solutions, combining PowerBuoy® persistent power stations, Wave Adaptive Modular Vessel (WAM-V®) unmanned surface vehicles (USVs), and the AI-capable Merrows™ command and control system.
• This integrated approach addresses critical gaps in maritime domain awareness for defense, offshore energy, and ocean research markets in the US as well as overseas.

• Crude oil futures were lower Wednesday but benchmarks continued to trade in the narrow range in place since last week.
• Front-month Jan25 ICE Brent futures were trading at $63.54/b (2135 BST) versus Tuesday’s settle of $64.44/b, while Dec25 NYMEX WTI was at $59.62/b against a previous close of $60.66/b.
• The market has been looking for direction since Sunday’s OPEC+ meeting when the eight members taking part in voluntary cuts added another 137,0000 bpd to quotas in December, although countered this with a pause on any further increases in Q1.

• D3 Energy Limited (ASX:D3E) continues to represent a compelling investment case as a leveraged play on natural gas and helium projects in South Africa.
• The association of natural gas with globally significant helium concentrations gives the company a material point of differentiation compared to its listed upstream peers.
• D3E has delivered significantly positive results through its first stage drilling and testing activity, independent certification of initial reserves and resources, and a Production Right Area (PRA) application that could see the company at a project sanction stage by end-2026.

• Major Drilling is a global leader in specialized contract drilling for the mining industry, strategically positioned to benefit from increased exploration budgets, particularly for metals essential to the energy transition.
• The company’s extensive experience, modern fleet, and focus on specialized, complex drilling projects create a competitive advantage and support relationships with major mining companies.
• Financial performance is inherently tied to the cyclical nature of the mining industry and commodity prices, with recent results showing margin pressure despite long-term revenue growth.

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• Cardinal Resources was a single-asset gold development company whose primary value was derived from its 100%-owned Namdini Gold Project in Ghana, a large-scale, long-life asset.
• In 2020, the company became the subject of a prolonged and competitive bidding war, primarily between Russia’s Nordgold and China’s Shandong Gold, which significantly drove up its valuation and highlighted the strategic appeal of the Namdini project.
• The company was ultimately acquired by Shandong Gold Mining (HongKong) Co., Limited in a transaction that concluded in early 2021, leading to the delisting of Cardinal Resources from the ASX and TSX in February 2021.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

bp reported Q325 underlying replacement cost (RC) profit of $2.2bn (Q225: $2.4bn), with stronger operating performance partly offset by a higher tax rate (due to regional profit mix changes). Operating cash flow rose to $7.8bn from $6.3bn, supported by a working capital release of around $0.9bn compared to a $1.4bn build last quarter. Net debt remained stable at $26.1bn, despite redeeming $1.2bn in hybrid bonds. The dividend was maintained at 8.32c per share, and bp announced a further $0.75bn share buyback to be completed before the Q4 results. Capital expenditure of $3.4bn was consistent with FY25 guidance of around $14.5bn.