In today’s briefing:
- Japan – Shorts & Positioning on Passive Sells
- Vitol/Saras: Time to Bid Farewell
- Ring Energy, Inc. – Estimate Update
- HighPeak Energy, Inc. – Dividend Hike; Estimate Update
- OceanaGold Philippines Pre-IPO Tearsheet
Japan – Shorts & Positioning on Passive Sells
- BayCurrent Consulting, Open House, Sumitomo Chemical, Koei Tecmo Holdings, Kose Corp, Oji Holdings, Daiwa House Reit Investment and Tosoh Corp will have passive selling at the close on 29 February.
- Short interest has increased on all these stocks over the last few weeks and there has been big underperformance versus the Nikkei 225 Index and TOPIX Index.
- Cumulative excess volume has increased on the stocks and there will be short covering in the last week of the month.
Vitol/Saras: Time to Bid Farewell
- The Morattis have agreed to sell their 40% stake in Saras SpA (SRS IM) to Vitol at €1.75/share (implied equity value €1,664 million), which will trigger a mandatory takeover offer.
- Saras has only an asset, the largest refinery in Italy, based in Sardinia, which should add scale to Vitol. At 12.5x Fwd P/E, the offer represents a premium to peers.
- Considering the unimpressive stock market performance of Saras since listing, and potential Trafigura overhang, it’s a good time to cash in. Spread is 1.54%/8.58% (gross/annualised, assuming settlement by 23 April). Long.
Ring Energy, Inc. – Estimate Update
- Ring’s 4Q23 production averaged ~19,400 BOE/d, near the high end of management’s 18,900-19,500 BOE/d guidance range.
- Average production increased 11% from 3Q23, reflecting the full-quarter inclusion of volumes acquired in the Founders acquisition, which closed in August 2023, and from volumes added from the completion of the 2023 development program in the quarter.
- Management expects 1Q24 production to average 18,000-18,500 BOE/d. 1Q24 volumes were adversely affected by winter weather disruptions in January, which deferred ~1,900 BOE/d for 10 days and natural declines from wells completed during 2H23.
HighPeak Energy, Inc. – Dividend Hike; Estimate Update
- HighPeak declared a quarterly common stock dividend of $0.04 per share on February 5, 2024, a 60% increase from the prior dividend of $0.025 per share.
- The 1Q24 dividend will be paid on March 25, 2024, to shareholders of record as of March 1, 2024.
- The board also authorized a $75-million common stock repurchase program effective through December 31, 2024.
OceanaGold Philippines Pre-IPO Tearsheet
- OceanaGold Philippines (OGCP000D PM) is looking to raise up to US$140m in its upcoming Philippines IPO. The deal will be run by BDO Capital and CLSA.
- OceanaGold Philippines (OGPI) is a producer of gold and copper in the Philippines, and a subsidiary of OceanaGold Corporation, a Toronto Stock Exchange (TSX) listed gold mining and exploration company.
- Based on the Mines and Geosciences Bureau (MGB), OGPI was the second largest producer of gold and copper in the Philippines for FY22 and 9M23.
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