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$53.8m
Last closeA$0.06
High / Low (52 weeks)A$0.1 / A$0.1
Stock market listingAU
Forecast net debt (A$m)58.2
Forecast gearing ratio (%)248
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(3.1)(10)(16)
Relative *(2.4)(9.4)(23.8)

* % 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 15.6 2.1 (3.7) (0.5) N/A N/A
2018E 53.2 28.8 6.9 0.4 15.8 14.2

Last updated on 24/05/2017

Latest research

Investment summary

ELK recently acquired a c 14% interest in the ConocoPhillips-operated Madden Gas Field, as well as the 310mmscf/d capacity Lost Cabin Gas Plant in Wyoming. This elevates ELK to producer status, with cash flow being generated from Madden methane sales. The Madden field is also a significant CO2 producer, fulfilling ELK’s strategy of CO2 integration, securing supply for future CO2 enhanced oil recovery (EOR) projects. Elk’s Grieve CO2 oil development project is forecast to commence production by late CY17/early CY18 at initial production rates of 1,700 to 2,200bbl/d net to Elk. Our base case 2P NAV stands at A$0.11 with significant upside in the event of oil/gas price recovery and/or incremental reserve/resource recovery above audited 2P estimates.

Last updated on 01/06/2017

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 01/06/2017

Key management

Brad Lingo , CEO
Alexander Hunter, CFO

Company address

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