Elk Petroleum (ELK)

Business description

Elk Petroleum is an EOR company focused on low-cost tertiary recovery of residual oil. Elk now has production from its Madden/Lost Cabin gas and CO2 project interest. Elk’s Grieve CO2 EOR oil project in the US is targeted for first production in late CY17/early CY18.

Stock data

Market cap.A$61.7m
Last closeA$0.07
High / Low (52 weeks)A$0.1 / A$0.1
Stock market listingAU
Forecast net debt (US$m)61.7
Forecast gearing ratio (%)287
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

Relative *8.015.7(8.4)

* % Relative to local index

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Y/E Jun Revenue (US$m) EBITDA (US$m) PBT (US$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 6.3 (2.4) (4.5) (0.6) N/A N/A
2018E 31.0 14.0 (2.9) (0.5) N/A N/A

Last updated on 15/08/2017

Latest research

Investment summary

Elk Petroleum (ELK) is an ASX-listed oil and gas producer and developer with a focus on enhanced oil recovery (EOR) from mature fields. The company’s current focus is on CO2 EOR projects in Wyoming, US, where it’s first EOR development project, Grieve, is due on stream in late 2017/ early 2018. Grieve, combined with the recent acquisition of a c 14% interest in the Madden gas field is due to turn ELK into a producer and material CO2 resource owner. We visited both Grieve and Madden in July 2017, which helped highlight a number of opportunities management is actively engaged in targeting. These include resource upside at both Grieve and Madden, numerous high IRR infrastructure optimisation opportunities and CO2 EOR opportunities in the vicinity of ELK’s operated assets. Our valuation of ELK reduces from A$0.11/share to A$0.09/share due to a reduction in Edison’s long term oil price assumption from $80/bbl (2022) to 70$/bbl.

Last updated on 14/08/2017

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 03/08/2017

Key management

Brad Lingo , CEO
Alexander Hunter, CFO

Company address

Level 1, Suite 101
10 Bridge Street
NSW, 2000
+61 2 9093 5400
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