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AJ Lucas Group (AJL)

Business description

AJ Lucas has investments in the exploration and commercialisation of shale gas in the UK through licence equity interests and a stake in Cuadrilla. AJL also has two Australia-based operating business units: Drilling Services (LDS) and Engineering & Construction (LEC).

Stock data

Market cap.A$270m
Last closeA$0.36
High / Low (52 weeks)A$0.5 / A$0.2
Stock market listingAU
Forecast net debt (A$m)56
Forecast gearing ratio (%)46
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual4.34.338.5
Relative *2.4(1.8)25.6

* % Relative to local index

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Company news

Investment summary

AJ Lucas offers investors exposure to the most advanced UK shale appraisal programme. Current activity is focused on drilling at Preston New Road where AJL has approval to drill and test up to four horizontal wells. To date one horizontal well has been drilled and a second is nearing completion. An application for hydraulic fracturing of the first of these wells has been submitted to the government. Given uncertainties, we currently utilise a probabilistic approach to valuation estimating a 67% chance of commercial success for UK shale (NPV15>0). At a group level, incorporating AJL’s operating business units and net debt, we derive a P50 (mid-case) valuation of A$0.86/share.

Last updated on 29/06/2018

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2016A 126.0 (2.4) (12.7) (4.93) N/A N/A
2017A 122.6 (8.7) (36.3) (6.67) N/A N/A
2018E 122.1 (5.4) (23.7) (3.46) N/A N/A
2019E 97.3 1.1 (12.0) (1.89) N/A N/A

Last updated on 22/06/2018

Latest research

Dominant Bowland shale position

Initiation | Oil & Gas | 09/04/2018

Latest video

Bitesize briefing – AJ Lucas Group

Industry outlook

AJ Lucas has investments in the exploration and commercialisation of shale gas in the UK through licence equity interests and a stake in Cuadrilla. Central government supports the exploitation of shale gas resource in order to increase domestic energy security and to support intermittent renewable energy sources.

Last updated on 29/06/2018

Key management

Phil Arnall, Chairman
Austen Perrin, CFO
Marcin Swierkowski, Company Secretary

Company address

Level 6, 1 Elizabeth Plaza
North Sydney, NSW
2060
Australia
+61 (0) 2 9490 4000
View website