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Elk Petroleum (ELK)

Business description

Elk Petroleum is focused on low-cost tertiary recovery of residual oil. It has production from its Madden/Lost Cabin gas and CO2 project and the Aneth oil field. The Grieve CO2 EOR oil project in the US achieved first oil in April 2018.

Stock data

Market cap.A$111.6m
Last closeA$0.07
High / Low (52 weeks)A$0.1 / A$0.1
Stock market listingAU
Forecast net debt (m)N/A
Forecast gearing ratio (%)N/A
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(1.3)(22.1)19.4
Relative *(1.4)(24.3)11.5

* % Relative to local index

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Company news

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2016A 0.0 (4.7) (5.2) (2.0) N/A N/A
2017A 5.0 (5.2) (8.1) (0.9) N/A N/A
2018E N/A N/A N/A N/A N/A N/A
2019E N/A N/A N/A N/A N/A N/A

Last updated on 25/04/2018

Latest research

Investment summary

Elk Petroleum’s (ELK) acquisition of a 63.7% operated interest in the Aneth Rocky Mountain CO2 EOR project from Resolute Energy transforms the company into one of the largest producers on the ASX. Management forecasts 2018 net production of 11mboe/d. At US$160m, the deal was priced at a discount to our 1P estimate of proven developed reserve value of US$178m (excluding US$23m, which ELK retains in escrow to cover abandonment costs). The Aneth transaction was funded through new equity and debt, with rapid debt paydown expected from Grieve, Madden and Aneth cash flows. Our valuation reflects forecast Aneth cash flows, at $A0.12/share. Our forecasts are under review.

Last updated on 27/04/2018

Industry outlook

Alongside field operators Denbury and ConocoPhillips, ELK management has identified numerous field optimisation opportunities at Grieve and Madden with high risk-adjusted returns (many in the 50-100% IRR range). ELK continues to consolidate Rocky Mountain CO2 EOR projects.

Last updated on 27/04/2018

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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