RNS Hotlist March 3: Arrow, Avation, Bens, Bradda, Conroy, Enwell, Invinity, Longboat, Mercantile, Quadrise

Avation (AVAP), the commercial passenger aircraft leasing company, announced unaudited results for the six months ended 31 December 2022. Revenue and other income reduced to $55.3 million (2021: $60.1 million). Operating profit increased to $35.0 million (2021: $18.8 million). Profit before tax of $6.7 million (2021: Loss before tax $15.9 million). The company said Avation has continued to de-lever its balance sheet, achieving a reduction to 62.9% in the ratio of net debt to total assets as at 31 December 2022.  A significant portion of the cashflow generated by the fleet has been directed towards repayments of debt.

Comment: As suggested in the aftermath of yesterday’s airline customer win, Avation has turned around on a fundamental basis, but the share price is still only a fraction of pre-pandemic levels. The swing to profit today underlines the recovery credentials. 

Arrow Exploration (AXL) updated on the Rio Cravo Este-3 well, an appraisal / development well on the Tapir Block in the Llanos Basin of Colombia. The company said RCE-3 is currently flowing better than expected. The continued strong production rates from existing tied-in wells combined with the encouraging results from new wells in Colombia continues to provide it with confidence that our objective of achieving a production rate of 3,000 boe/d within 18 months of the AIM listing can be achieved.

Comment: It seems to be all about the 3,000 barrels a day, and ideally a sustained move through 20p for AXL. However, the company is already positioned as one of the best small cap prospects in its part of the market. 

Conroy Gold and Natural Resources (CGNR), the gold exploration and development company, announced the discovery of a new gold target in County Monaghan.  The company said this discovery, together with the recent discovery of a gold target in County Armagh has led to the identification of a second gold trend in the Longford-Down Massif.

Comment: One supposes CGNR would be more appreciated by the market if there was an indication not only of their being gold in them hills, but how much was there, but the latest news should be enough to allow a resumption of the recent share price recovery in the stock.

Bens Creek Group (BEN), the owner of a metallurgical coal mine in North America, announced that MBU Capital Group Limited has exercised its right to convert the full outstanding amount of its loan facility with the Group into new ordinary shares of 0.1p in the Company. The company has also agreed with MBU to vary the conversion price of the proportion of the Loan Facility that is convertible at 60p to now convert at 30p. BEN said it believes the amendment of the conversion price on the £1.7 million (which includes  accrued interest) from 60p to 30p is in the best interests of the company and its shareholders as it improves the Company's financial performance, by reducing debt, interest payments and outgoing cashflow.

Comment: The closeness of the relationship between Bens and MBU would apparently put many marriages to shame. The sooner the financial contingencies are sorted out in an understandable way to the market, the quicker the chance of the shares recovering their former glory.

Invinity Energy Systems (IES), a manufacturer of utility-grade energy storage, announced that it has entered into a prepayment agreement to repay the outstanding drawn amount of the convertible loan facility with RiverFort Global Opportunities PCC Ltd and YA II PN Ltd.  which was announced on 14 December 2022. The company said entering into the Facility in December 2022 supported the significant order backlog and considerable near-term commercial interest Invinity has attracted. This Facility has been an important bridge to the recently announced equity funding through the Placing, Open Offer and strategic investment. We look forward to repaying the Facility and convey our appreciation to Riverfort and YA for assisting Invinity during this period.

Comment: Another satisfied customer for Riverfort. 

Longboat Energy (LBE), the emerging full-cycle E&P company, provided an update on the status of the PL 939 licence which contains the Egyptian Vulture oil discovery. The company said the Egyptian Vulture discovery has significant upside and needs an aligned partnership to be efficiently appraised and progressed to a potential development project. It looks forward to creating a new group to take this high-potential asset forward.

Comment: Despite the company’s apparent progress on its journey, the shares remain rather under-loved. Hopefully, pushing Egyptian Vulture forward will move the dial.

Bradda Head Lithium (BHL), the North America-focused lithium development group, announces that further to its press release of 16 January 2023, it has on 2 March 2023 filed a Technical Report on SEDAR for the Mineral Resource Estimate for the Company's Basin East asset in Arizona.

Comment: Perhaps rather unfairly, shares of Bradda have been given something of a cold shoulder of late. We await fresh drivers from the company to finesse its strong geographical and asset advantages.

Quadrise Fuels International (QFI), the supplier of energy solutions, updated further to the company's announcement of 16 January 2023, on the testing of its bioMSAR™ fuel carried out by Wärtsilä Services Switzerland in December 2022. The company said the extensive tests undertaken by Wärtsilä clearly demonstrate the suitability of bioMSAR™ for use in both marine and power plant applications. This is an important step in clearing the fuel for commercial supply and it looks forward to progressing its final round of tests ahead of planned vessel trials with MSC for both MSAR® and bioMSAR™ later this year.

Comment: Having been on the back foot of late, it could be that the positive vibes around the latest bioMSAR™ news at least gets the shares back towards where they were in the autumn above 2.5p.

Enwell Energy (ENW), the AIM-quoted oil and gas exploration and production group, announce that the Supreme Court of Ukraine has issued a final decision in the legal proceedings relating to the validity of the production licence for the company's Vasyschevskoye  gas and condensate field in Ukraine. The company said although it was always confident on its legal position, it is nonetheless extremely pleased with the decision of the Supreme Court and the confirmation of the validity of its VAS licence.

Comment: Shares of ENW overshot to the downside in January, so it is to be hoped that the latest legal outcome continues to steady the ship, as much as is possible given current geopolitical machinations.

Mercantile Ports & Logistics (MPL) which is operating and continuing to develop a port and logistics facility in Navi Mumbai, Maharashtra, India, announce that its subsidiary, Karanja Terminal & Logistics Private Limited, has signed a three-year agreement with Rudra Marine Services for handling of various liquid commodities at the Company's facility at Karanja. The company said this contract sees it making further progress on its goal to embed Karanja into the regional infrastructure system. It also demonstrates Karanja's multi cargo capabilities and its Facility's ability to attract customers across the trading spectrum. 

Comment: Off the radar MPL may becomes slightly less so after today’s news, although there is a lot of work to do given that the shares are trading at just a quarter of where they were in May.