GBC AG: Saturn Oil & Gas Inc. | Rating: BUY

Original-Research: Saturn Oil & Gas Inc. - von GBC AG

Einstufung von GBC AG zu Saturn Oil & Gas Inc.

Unternehmen: Saturn Oil & Gas Inc.
ISIN: CA80412L8832

Anlass der Studie: Research Report - Corporate site visit Empfehlung: BUY
Kursziel: 12.17 CAD
Kursziel auf Sicht von: 31.12.2022
Letzte Ratingänderung: -
Analyst: Julien Desrosiers; Felix Haugg

Oxbow facilities

We had the chance to visit the newly acquired Oxbow Asset in September 2021. The site visit included a complete tour and presentation of new management as well as a trip to production assets, pads, facilities and an introduction to many employees and contractual companies. The assets visited were located in a fairly concentrated area around the small town of Carlyle. We also engaged with the local community to understand their perception of the company and their arrival in their community.

We were impressed with the quality of the assets acquired. The infrastructure is in pristine condition which held true for every single site we visited. We previously described the assets as: The infrastructure that will be acquired by Saturn has a strong history of upkeep and maintenance by the previous owner and does not require any major upgrades or refurbishments. We can now confirm that this is not only correct but the quality of the assets and especially maintenance exceeded our expectations.

The news of the acquisition was well received in the region. This asset was not considered core by the previous owners and, even if they had maintained all equipment, facilities, and infrastructure in the best condition, they had not injected additional development capital for a long time. Therefore, the new blood injected into the region by Saturn Oil & Gas was much welcomed and the comments we heard were only positive. The local community has a strong agricultural as well as oil and gas background and both sectors usually fit easily with one another to form coherent economic development. The steady income for farmers of the lease of a small part of their land to oil companies complements their volatile revenues from their main activity.

The community seems to be looking forward to more capital spending in their region and the employees that are now under new management seemed to have very precise and efficient strategies to maximize the potential of this asset.

As core values of investors are more and more driven by sustainability, we were very pleased to assess in person the support of the local community towards Saturn Oil & Gas-from employees and various stakeholders to community members. They seem to desire far more development and capital injection in their area and are ready to take active steps in this direction.

One can expect that thousands of producing wells and additional assets would require heavy manpower to maintain. However, nothing could be farther from the truth. In total, Saturn Oil & Gas now has 45 field employees in Saskatchewan that report to two superintendents and one operations manager who reports directly to the CEO. As most of the wells are connected to a pipeline system, the assets are also very low maintenance. As a result, the company is able to maintain a lean management structure, increase cost efficiency and run their operations better than before. The Oxbow asset workers have been working on those fields for years, if not decades. They are very well versed technically as well as on the specifics of these oil fields. Therefore, they do not constitute a dilution in the company's talent pool but rather an increase in their human capital.

The company is using Afti' Watchdog technology at many of their production sites and have initiated a full rollout. This technology allows Saturn Oil & Gas to monitor their wells 24/7 with a webcam live feed. During our site visit, we had the chance to witness the details and result analyses and reports that this product generates. We are convinced that this is a revolutionary product and Saturn Oil & Gas, as early adopters of this technology, will benefit greatly from it.

Firstly, it will be beneficial to limit environmental issues that could arise at the wells by decreasing the time between a possible leak and human intervention. Secondly, it allows the company to monitor their operations with different electronic sensors at a completely new level. Thirdly, in case of an incident, the well can be shut down remotely. This will further increase the efficiency of their team given that most physical and visual inspection will be able to be conducted remotely. This means that there is less time spent driving to inspect operations sites, fewer emissions and fewer accidents. This will further add to the lean structure and low operation costs of the company.

At minimal cost, we believe that the company added a massive protection layer onto their operations. Once again, Saturn Oil & Gas has shown their level of commitment to their assets and core sustainability values.

Note: The full report was published on December 21st 2021 and can be found here:
http://www.more-ir.de/d/23223.pdf

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/23324.pdf

Kontakt für Rückfragen
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,6a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung
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Time of completion: 01.02.2022, 17:15
Time of publication: 02.02.2022, 10:30

-------------------übermittelt durch die EQS Group AG.-------------------

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw. Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.