Energy companies in Europe

[Hallucigenia]

So following on from my rambles in the oily view from August 2022 thread, I went looking for companies in markets outside London that have exposure to European gas and electricity. I've not got as far as coal yet, but it's not a sector I know so well and it's going to be less popular with institutions on ESG grounds. OTOH bumper cash flows and investor unpopularity make for crazy metrics, I think it was the IC that recently highlighted one with 42% yield - that kind of thing is a sure bet for an industry acquisition.

Obviously the national champions like Eni, Galp, OMV etc are options, they will work for those drawn to multi-£bn companies with lots of cash flow producing good dividends (Eni yields over 7% at the moment). OTOH they are high-profile targets for government intervention (qv EDF) and there's no way that they will be allowed to be bought by a predator outside the country. But it's an equation that will work for many. In particular Romania could be interesting as a rare example of an EU country other than NL with major domestic production - historically it only imported about 10% of its gas, although that is increasing - and although the government owns 70% of Romgaz, the rest is publicly traded. I won't consider the national champions further here, maybe in another post but they're not really my thing.

For convenience I've used the Yahoo tickers of the most liquid market and grab market cap etc data from Yahoo, although they're not the most reliable especially when it comes to things like divis (they quote UK divis in pounds which makes them 100x out when you try to divide them into a shareprice in pence...) It's worth emphasising these are not recommendations to buy, this is just a list of everything I could find in non-London markets that was vaguely relevant, as a basis for DYOR. There's really not many though, especially if you're looking for immediate "production" rather than jam tomorrow.

Aker BP ASA (DETNF) is a bit of an oddity at £20bn market cap - BP, Aker and most recently the Lundin family combined their oil interests offshore Norway and still retain 51% control of a focussed "super E&P" a bit like BG. 376kbpd production from 2800Mmboe reserves, but only 12% gas. Get a 5.6% yield.

But moving onto smaller companies we have :

Norwegian Energy Company ASA (NOR.OL) NOK358 shareprice, NOK9bn (£800m) market cap
Noreco has 176.6Mmboe reserves producing 26.9kboepd of which a third is gas, mostly offshore Denmark. More than doubled off its lows, but look to be growing production and an obvious takeover target I would have thought.

OKEA AS (OKEA.OL) NOK52, NOK5.4bn (£474m)
Revitalising old fields offshore Norway, 46.6Mmboe producing 19kboepd, a third gas. Not exciting, bit Dana-ish, Norwegian taxes and majority owners but it has production in the here and now. Thai company Bangchat owns 46.52% and Seacrest Capital (via OKEA Holdings) control another 15.6% - the latter seem to have been the junior partner in the original creation of the company and sold a chunk last year.

La Française de l'Energie (FDE.PA) €60.50, €313m
The former ASX-listed European Gas was persuaded to put on a beret and hum the Marseillaise, and is now just about the only listed way to play the French energy market. They have 68mmboe of CBM gas in northern France and 7.5MW of electricity generation, also getting into renewables. Historical metrics don't look great and they're very "obvious" to European investors but they must be making out like bandits in the current environment.

Gas Plus S.p.A. (GSP.MI) €3.78, €165m
A play on Italian gas and gas storage that is also starting to get into Romania, 21mmboe of which 75% is gas, unfortunately they are 73.94% owned by investment firm US.FIN. S.r.l., I never like majority owners. Developing a 35bcf storage project of which they own 60%, but it's not much use at the moment. 1.27% yield.

North European Oil Royalty Trust (NRT) US$17.90, US$165m
A pure play on the German border gas price, it is a US grantor trust with rights of up to 4% rights over some Shell and Exxon gas production in Lower Saxony. Paid out 38c in Q2, which would annualise to 8.5% yield, and is the only "clean" way to gain exposure from US markets. Obviously helps if you can use the tax benefits of royalty trusts. Effectively they have 400boepd production and 0.9Mmboe reserves but those metrics don't quite work for a royalty trust, just feel the payouts.

ADX Energy Ltd (ADX.AX) A$0.007, A$24m (£14m)
A European E&P that's managed to go down 30% this year. They have a bit of workover production and some exploration in Austria (some of which is partnered with Xstate Resource XST.AX but it's a minor part of Xstate) and a frozen redevelopment project off Sicily that's waiting for Italy to get its act together. Also trying to hype an old gas field near Vienna for hydrogen storage. Possibly a bit overlooked, the assets seem OK if a bit unexciting but possibly in the wrong financial structure and ripe for takeover. Claim to have 10x5.8mmboe targets ready for drilling, and an Italy announcement would give them a bounce.

Gas2Grid Limited (GGX.AX) A$0.002, A$8m (£5m)
Mostly Oz and the Philippines but they have exposure to France via acreage in Aquitaine that has been subject to a dispute with the government since 2013. The lawsuit could be worth €34m to them so it's kind of a Rockhopper situation, the hearing was due to be held on 29 June but was postponed at the last minute. Which is maybe not surprising given the current politics of energy in France, Gas2Grid is not really relevant to the current problem but may appeal to those wanting to punt on the French justice system.

Warrego Energy Limited (WGO.AX, £116m market cap) are mostly Australia but also own the other half of Prospex' GTP project in Spain, so depending on how you see the risk you may want to go with Prospex or Warrego.

Po Valley Energy Limited (PVE.AX, £42m) are a pure play on Italian gas exploration who have burned through huge wads of shareholders' cash whilst navigating the mire of Italian bureaucracy. Still, this could be their time now but they won't have production until next April with first gas from Podere Maiar, Teodorico is promised at 1765boepd but permitting issues means probably not until 2025. From what I can tell, the chairman's family owns 26.6% and the CEO 21.33% which is getting into uncomfortable territory for me.

Doriemus plc (DOR.AX) is a £4m oddity listed in Australia that has small bits of UKOG's projects onshore UK - 2.6% of Horse Hill and 5% of Arreton in the Isle of Wight. Fairly pointless, presumably it will be cleaned up at some point.

Atlantic Petroleum (ATLA-DKK.CO) is a <£3m Faroes company with 18.33% of Hook Head and 2% of Orlando offshore UK, won't have any production until a workover on Orlando.

And that's about it as far as I can see for companies in Western Europe - there's another 10 companies in Eastern Europe which I'll do in another thread at some point. I'll emphasise again - this is just flagging up what's out there for you to DYOR, not investment advice - in fact I'd regard several of the above as uninvestable.

[no position in any of the above at present]