Global Energy Development

www.globalenergyplc.com TICKER: GED     EXCHANGE: L

Global energy development is an upstream oil & gas exploration company, operating predominantly in Columbia and Peru. GED is achieving rapid production growth, with exposure to significant exploration and appraisal upside across the region. The company holds six contracts in Columbia and Peru, contracts supported by a strong management team with decades of operating experience in locating, developing and extracting reserves.

LATEST REPORTS

 
Huge discount to cash
Published: Jan 08 2015

GED is just one of many companies affected by the collapse in the oil price, but a major consolation for shareholders comes from its canny conservation of cash.
We estimate that free cash in the balance sheet amounts to about $41m, equal to a fully diluted 68p per share - more than 50% higher than the present share price.
The timing of the sale of the Llanos Basin assets has proved to be fortuitous.  GED might 'go dormant' and wait for the Brent price to recover while holding on to its licences. It could become a predator with the cash to support the acquisition of distressed E&P companies or another possible course of action would be either a liquidation of the company or a return of cash to shareholders.
 
Cash rich on Llanos assets sale
Published: Oct 16 2014

Global Energy Development ('GED')'s petroleum production and development operations are concentrated in oil-rich Colombia, a country in which the management team has decades of experience in pursuing a long-term strategy of finding and developing reserves.
GED's sale of its Llanos Basin assets will bring to the group about $50m in cash (before expenses). It will also leave it with a 50% working interest (after farm-out) in the Bolivar and Bocachico proven oil-rich licences in Bolivia's Middle Magdalena Valley.
More to the point, GED will have no debt, and cash and near cash in the balance sheet will approximate to 78p per share fully diluted (before transaction costs), based on the last published balance sheet (June 2014). This compares with a current share price of 51p. 
GED is now a 'clean' play on the Middle Magdalena properties, which opens a range of options for future corporate actions. We have changed our estimate of 'potential value' to reflect the impact of the transaction, and now have a figure of 557p per share, many times the current price.
 
Has the market got it wrong?
Published: Aug 11 2014

Global Energy Development's petroleum production and development operations are concentrated in oil-rich Colombia, a country in which the management team has decades of experience in pursuing a long-term strategy of finding and developing reserves.
We think market reaction could have been wrong this time in its savage treatment of GED's share price. The operational update on the Catalina-1 well on the Bolivar block reported low productivity of oil, and identified the reason as the presence of 'an emulsion substantially blocking most reservoir fluids from reaching the wellbore.'
Attention has focused on the apparent problem presented by the emulsion, failing to recognise the much more positive implications of it and the other information contained in the update.
The emulsion is a short term problem, indeed Hydraulic fracturing ('fraccing') itself appears to have caused the problem. It now looks as if that process will be unnecessary and recoverable reserves remain intact. 
Our core and potential valuations are reduced marginally, simply due to the recent strength of Sterling against the US Dollar. At 115p per share the core valuation is over twice the current share price.
 
A 'GO' for Bocachico
Published: May 07 2014

Global Energy Development has petroleum production and development operations concentrated in oil-rich Colombia.
Their second farm-out in less than two months activates the group's Bocachico reserves in the Middle Magdalena Valley in Colombia. The terms appear to be similar to those for Bolivar - for a 50% farm-out, a cash payment of $1m (as opposed to $5m), with a commitment to re-enter two existing wells within one year, and to drill a development well within two years.
GED has a risk-free carried interest of 50% in the development of the Bolivar and Bocachico contract areas, with gross 1P reserves of 33.2 MMBL and 2P of 90.4 MMBL. In addition, Bolivar contains further gross 3P reserves of 129.3 MMBL.
There is also the core producing Llanos Valley business (2P reserves 5.6 MMBL), on which we have put a risked value of 114p per share, against the current market price of 70.5p. 
 
Bolivar farm-out activates value
Published: Mar 28 2014

Global Energy Development ('GED') petroleum production and development operations are concentrated in oil-rich Colombia, a country in which the management team has decades of experience in pursuing a long-term strategy of finding and developing reserves.
The farm-out of Bolivar is what the market has been waiting for. It lends concrete substance to the argument that the group has enormous potential from its undeveloped massive reserves of oil in Colombia.Furthermore, the end 2013 reserves report confirms continuing production and positive cash flow from the group's core business in Colombia's Llanos Basin.
The 2013 results announced today also confirm the continuing strengths of the core business in terms of cash flow and balance sheet, with net borrowings down to a very modest 11% of net equity assets.
We see a solid 'core' business valued at 116p per share, well above the current 76p level. Our 'potential' value is a hefty 799p per share, with Bolivar (discounted for risk) accounting for 524p of that.
 
Global Energy Development Investor Presentation 25th September 2013
Published: Sep 24 2013

Steve Voss and Anna Williams give investors an update on Global Energy Development's prospects
 
Cash positive, massive shale oil potential
Published: Sep 09 2013

Global Energy Development has petroleum production and development operations concentrated in oil-rich Colombia, a country in which the management team has decades of experience in pursuing a long-term strategy of finding and developing reserves.
GED is known as an oil company with reserves which are massive in relation to its current production levels, but the stock market has tended to be sceptical in its valuation of the underlying potential.But advances in technology mean that the oil-rich Bolivar and Bocachico fields can now be considered as capable of fulfilling that potential:
  The Bolivar shale oil field has net 1P reserves of 24.2 MMBL, 2P 33.0 MMBL and 3P 105.7 MMBL. GED is at present seeking partners for development in an area which has already seen a number of large deals.
  The Bocachico heavy oil field has net 1P reserves of 12.3 MMBL, 2P 49.1 MMBL and 3P 83.5 MMBL. GED is testing a new pump based on CHOPS technology (see later), which, on success, can be rolled out for development of the entire field.
The current share price could be justified on production from the currently producing Llanos Basin fields alone: it takes little account of the potential from Bolivar and Bocachico. Conservatively assessing potential value, we reach 302p per share, still three times the present share price.

ARCHIVE

2005
Global Energy Development; Here comes the growth; production and cash flow to rise.
Published: Apr 22 2005

  • No surprises in results
  • Further positive newsflow expected
  • Core NAV (proven and probable) now 376p/share
  • Further risked upsides of 353p / share means 'full' valuation of 729p / share
  • Increase due to oil price forecast, royalty changes and further data on the first well in Block 95, Peru

GED follows the Inca Trail to Peru; substantial valuation upgrade
Published: Jan 06 2005

  • Positive recent newsflow
  • Revised core NAV (proven and probable) now £3.23 which is 117% above current price
  • Risked NAV now £6.15 which is 413% above current share price
2004
Global Energy Development poised for rapid production growth
Published: Oct 07 2004

  • Poised for rapid production growth in Colombia and Peru over the next 2-3 years.
  • Rapidly rising production and cash generation.
  • Narrow geographic focus.
  • Share price trading at a small discount to our core NAV of 193p(fully diluted).