Elk Petroleum (ELK)

Business description

Elk Petroleum is an enhanced oil recovery (EOR) company. This technology achieves low-cost tertiary recovery of residual oil. Elk’s first project at Grieve in the US is targeted for first production in CY17. There is a significant opportunity to apply EOR in Australasia, Indonesia and Malaysia.

Stock data

Market cap.A$62.4m
Last closeA$0.07
High / Low (52 weeks)A$0.1 / A$0.1
Stock market listingAU
Forecast net debt (A$m)24
Forecast gearing ratio (%)50
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(5.2)9.03.4
Relative *(3.9)7.5(6.5)

* % Relative to local index

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Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2015A 0.0 (3.1) (3.6) (1.9) N/A N/A
2016A 0.0 (5.0) (5.7) (2.2) N/A N/A
2017E 0.0 (4.9) (7.0) (0.5) N/A N/A
2018E 38.0 24.5 8.6 1.1 6.6 3.5

Last updated on 15/02/2017

Latest research

Grieve fully funded

Update | Oil & Gas | 26/08/2016

EOR delivering in a down-cycle

Initiation | Oil & Gas | 04/05/2016

Investment summary

In January 2017, ELK acquired a c 14% interest in the Maddon Gas Field (ELK share: 12.9mmboe) and Lost Cabin Plant in Wyoming. A key motivation was the 20% CO2 content of its gas, enabling ELK to become vertically integrated in CO2, coincident with its strategy of expanding oil production by acquiring Enhanced Oil Recovery (EOR) projects. The acquisition transforms ELK immediately into a profitable producer, albiet gas rather than oil, with its Grieve EOR project expected to start production in late 2017/early 2018. ELK's share of Madden has the potential to generate US$7-8.5m pa cash flow at consensus gas prices, comparing favourably with the US$20m purchase price.

Last updated on 02/03/2017

Industry outlook

At current low oil prices, many fields suitable for EOR are uneconomic for conventional oil. EOR is a tertiary recovery method to target the substantial residual oil remaining in mature or life expired fields. The low oil price environment may assist ELK cost-effectively securing additional oil acreage.

Last updated on 02/03/2017

Key management

Brad Lingo , MD
Alexander Hunter, CFO

Company address

Level 1, Suite 101
10 Bridge Street
Sydney
NSW, 2000
Australia
+61 2 9093 5400
View website