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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$191.3m
Last closeA$0.26
High / Low (52 weeks)A$0.5 / A$0.2
Stock market listingAU
Forecast net debt (A$m)86.3
Forecast gearing ratio (%)67
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(21.5)(28.2)(30.7)
Relative *(20.3)(21.1)(26.4)

* % 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 at Preston New Road where AJL is hydraulically fracturing two horizontal wells. Operations will take approximately three months to complete from initiation for both horizontal exploration wells with initial results expected in early 2019. 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, and based on the FY18 results (to end June 2018) we have updated our P50 (mid-case) valuation to A0.93/share.

Last updated on 29/11/2018

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2017A 122.6 (3.8) (36.3) (6.67) N/A N/A
2018A 127.1 15.4 (16.7) (1.14) N/A N/A
2019E 127.2 13.5 (8.9) (1.47) N/A 8.7
2020E 129.7 13.9 (4.0) 6.89 3.7 15.9

Last updated on 23/11/2018

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 29/11/2018

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