March 30th, 2023 | 12:15 CEST
Saturn Oil + Gas, Bayer, Amazon - Big business on a growth path
Table of contents:
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
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Saturn Oil & Gas - FY 2022 financial results
Sanctions against Russia are making it difficult for European companies, in particular, to supply their local production sites with cost-efficient energy. DAX corporations such as BASF, Bayer and Volkswagen are consequently increasing the output of their sites in non-European countries. Demand for oil and gas has never been as high as it is now.
The Canadian company Saturn Oil & Gas convinces with results from the last fiscal year. In 2022, the Company's operational achievements are impressive, with a focus on optimizing existing assets to now taking steps toward growth. "Last year was the most active year for light oil development in Saturn's history. The Company drilled 57.5 horizontal wells targeting light oil with 100% success," commented Justin Kaufmann, Chief Development Officer.
Average production increased 133% to 9,593 boe/d, compared to average production of 4,117 boe/d in 2021. Adjusted cash flow increased 335% to EUR 80.5 million, compared to EUR 18.5 million in 2021, resulting in an 89% increase in adjusted cash flow per share to EUR 1.81, compared to EUR 0.96 in 2021.
On February 28, 2023, the Company completed the acquisition of Ridgeback Resources Inc, a private oil and gas producer focused on light oil in Saskatchewan and Alberta, Canada. The Ridgeback acquisition adds approximately 17,000 boe/d of current production (71% light oil and NGLs) and 670 net sections of land.
"In addition to the recently completed Ridgeback acquisition, Saturn has made two additional acquisitions in our primary development area in West Central Saskatchewan. In addition to the high net light oil production acquired, the extensive land base gained from the acquisitions has been the focus of our drilling activity in 2022." For investors, the full results here are available for review. For those interested in meeting the management team in a live video presentation, please SAVE THE DATE for May 10, 2023, when VP Kevin Smith will speak about future plans and be available in a Q&A for all interested investors at 6 pm CET (12 pm EST, 12 pm HKT). Click here to go to pre-registration.
Bayer - Moving away from women's health to neuroscience and oncology
Structural changes are looming in the Bayer Group just before the new CEO Bill Anderson takes office. Bayer's pharmaceuticals unit, headed by Stefan Oelrich, is leaving women's health. A few years ago, that sounded quite different, marked by the acquisition of Schering AG, which became successful, especially with hormone preparations for contraception.
"In research and subsequent clinical phases, we will no longer focus explicitly on women's health," Oelrich said. The Company is in the midst of clinical development of the non-hormonal menopause drug elinzanetant, opening up a potential global market for menopausal women experiencing menopause-related symptoms. In 2022, the global menopause products market was estimated to be worth EUR 14.8 billion. In 2023, this market is expected to grow to EUR 15.6 billion. Moving away from women's health signals investors to take a more solid stance and steer away from lawsuit traps that have so far cost the group billions.
Future pharma pipeline focuses on drug discovery and development of therapeutics in neurology, oncology, cardiovascular disease, rare diseases and immunology. For a series of recent agreements aimed at becoming a major player in cell and gene therapy has caused neurology, rare diseases and immunology to take on an increasingly important role, according to Oelrich's statement.
WallStreetBets - AMC soars on Amazon takeover rumors
Shares of movie theatre operator AMC were up about 11% by Monday's close. Amazon founder Jeff Bezos is said to have instructed his investment advisors to explore takeover options for US cinema chain AMC. Thanks to the share price gain, the Company now has a market value of around EUR 2.2 billion. AMC became a popular stock among a community of non-institutional short-sellers on Reddit called r/wallstreetbets. This dedicated group of retail investors specializes in seeking out stocks with a high risk for short selling.
Short-selling involves an investor borrowing an asset (e.g., stock) and agreeing to buy it back at a later date and return it to the original owner. Short-sellers bet on falling prices. Securities such as GameStop or AMC experienced huge price gains of well over 100% in a very short period of time due to the Reddit community. As one of the famous "meme" stocks, AMC was valued at more than EUR 21.2 billion at the peak of the Reddit-triggered price increase in June 2021. Thus, AMC came to be grossly overvalued despite a poor economy.
Since the pandemic and the continued expansion of streaming offerings, movie theatre operators like AMC have found it difficult to attract sufficient audiences. High inflation and increased costs for everyday goods are also causing consumers to cut back, especially on leisure budgets. According to Refinitiv, AMC has a total long-term debt of EUR 4.8 billion.
Canada's Saturn Oil & Gas stands out with a solid fiscal 2022. It has laid the foundation for solid growth in the years ahead. When Buffett increases his investments in oil companies, it is a sign for investors to take a closer look at this very industry. On the other hand, Bayer investors are looking with great hope to the coming change in leadership at the top of the Group. The major clean-up is beginning, and the focus is increasingly on growth markets such as neurology and oncology. Those who prefer to turn to lighter topics can look to AMC and the entertainment market, which Amazon serves with its Prime offering - maybe with classic movie theatres like in the times before streaming offers.
Conflict of interest
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