In today’s briefing:
- Xanadu (XAM AU): A Mongolian Face To A Mongolian Project
- [IO Technicals 2025/21] Bullish Momentum to Persist
- Ring Energy, Inc: Estimate Update; Focusing on Debt Reduction
- Indian SR Prices Downward, But Domestic Demand Upbeat
- Journey Energy, Inc: Focus on Unconventional Duvernay Growth Underpinned by Long-Lived Assets
- TMC US: Capital Injection and Regulatory Clarity Pave the Way for Sprint Toward Approval
- Targa Resources: An Insight Into Its Permian Basin Positioning
Xanadu (XAM AU): A Mongolian Face To A Mongolian Project
- Back on the 21st May, Xanadu Mines (XAM AU), a Mongolian copper-gold mining play, inked an off-market deal with Bastion @A$0.08/share in cash.
- Bastion comprises Singapore-based Baroo (comprising board members from Mongolia) and Xanadu director Ganbayer Lkhagvasuren. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted.
- A follow-up Q&A session is worth listening to in full to gauge why Zijin (JV partner and 19.8% shareholder) may view Bastion taking control of XAM as a good thing.
[IO Technicals 2025/21] Bullish Momentum to Persist
- Disappointing industrial production and consumer spending data from China, along with stagnant new housing prices, dampened investor sentiment.
- Steel consumption remains robust even amid China’s property sector woes, as elevated mill activity and profitability at 60% of blast-furnace plants highlight the market’s core strength.
- On the technical front, current prices remain above the 21-day and 50-day moving averages, suggesting a positive short-to-mid-term trend.
Ring Energy, Inc: Estimate Update; Focusing on Debt Reduction
- After adding ~2,300 Boe/d of shallow-decline production in the Lime Rock acquisition, management altered its FY25 capital program to favor allocating free cash flow to debt reduction.
- 2Q25 capital spending guidance was lowered by more than 50% from prior expectations, yet production guidance was maintained at 20,500-22,500 Boe/d (13,700-14,700 Bo/d).
- Updated full-year guidance reflects a 36% capital spending reduction from management’s initial outlook and a 5% production reduction.
Indian SR Prices Downward, But Domestic Demand Upbeat
- Slipping butadiene costs impact prices of SBR, BR and NBR
- Near steady domestic production fails to match rise in consumption
- EPDM, Silicone Rubber prices near stable since February
Journey Energy, Inc: Focus on Unconventional Duvernay Growth Underpinned by Long-Lived Assets
- Journey reported 1Q25 earnings on May 8 and subsequently released a new investor presentation.
- It included a longer-term outlook on the Duvernay JV with forecasted development plans.
- Journey also provided forecasted sensitivities for earnings on the developing power business.
TMC US: Capital Injection and Regulatory Clarity Pave the Way for Sprint Toward Approval
- Eventful start to the year. Last week, TMC provided the investment community with an update on its business performance, 1Q25 financial results, and events that took place after the close of the quarter, which included completing a successful capital raise and filing three applications with the NOAA for exploration and commercial collection of polymetallic nodules in the Clarion-Clipperton Zone (CCZ) of the Pacific Ocean.
- 1Q25 operating loss and cash use rates reduced. TMC’s 1Q25 operating loss of $18 million improved from the year-ago loss of $24.7 million as an $8.6 million decline in exploration and evaluation expenses was partially offset by a $1.9 million increase in general & administrative expenses.
- TMC used $9.3 million in cash during the quarter, slowing its cash burn rate from last year’s $11.8 million.
Targa Resources: An Insight Into Its Permian Basin Positioning
- Targa Resources Corp., a key player in the midstream energy sector, presented its first-quarter 2025 earnings, demonstrating a mixed performance influenced by a combination of operational excellence and market challenges.
- The company reported record adjusted EBITDA driven by strong activity in the Permian Basin, despite facing adverse winter weather conditions that impacted volumes.
- However, the company’s proactive approach to managing these interruptions, including strategic purchase and storage of steel to mitigate potential tariff impacts, stands out as a positive aspect.
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