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i3 Energy plummets on share placing, acquisition news; Somero Enterprises lifts guidance

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The Somero Enterprises (LSE: SOM) share price has risen an impressive 10% in Wednesday business to 475p per share. It jumped to fresh record peaks near 490p earlier in the session following the release of bubbly trading figures. And the UK engineering share is now 110% more expensive that it was 12 months ago.

Somero has leapt after declaring that it enjoyed “stronger than anticipated trading” in the US at the end of the first half. This meant that the business — which manufactures concrete placing equipment such as screeds — said that trading for the full year would likely beat previous expectations.

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The AIM company said that it now expects revenues of $110m in 2021, up $10m from its last forecast in May. Adjusted EBITDA, meanwhile, is tipped to come in at $35m versus $31m previously. And Somero expects to have net cash above $33m on its balance sheet at the year’s end.

Somero Enterprises jumps

Pleasingly, Somero Enterprises said that its better-than-expected momentum in recent months had carried over to the second half, too. It indicated that customer workloads are “at high levels” while project backlogs are extending into 2022.

Somero said that its robust trading in the US “is due in part to catch up on projects previously slowed by Covid restrictions” as well as “a healthy and active US non-residential construction market.” The company added that activity in the first six months of 2021 in the UK and Australia had met expectations.

i3 Energy raises funds to expand in Canada

i3 Energy’s (LSE: I3E) share price hasn’t fared nearly as well as Somero Enterprise’s in midweek trading. It continues to collapse from the 20-month highs recorded at the start of the week. And at 12.25p per share, the UK oil share was last dealing 15% lower on the day.

AIM-traded i3 Energy has dropped after successfully raising £40m through a share placing to fund expansion of its operations in Canada. The business has agreed to purchase certain assets from Cenovus Energy within the Central Alberta region for $53.7m.

Production tipped to soar

The acquisition will see the UK share acquire 8,400 barrels of oil equivalent barrels per day “of predominantly operated, conventional, low-decline production,” i3 Energy said, as well as “an extensive network of complementary midstream infrastructure to support long-term sustainable operations.”

Some 51% of this newly acquired production comprises oil and natural gas liquids. The assets also carry a large reserve base with proven and probable reserves (2P) of 79.5 million barrels of oil equivalent with a value of $193m.

i3 Energy said that the production, infrastructure, and 212,000 acres of land it will acquire “directly overlap” its own current asset base “and provide meaningful operational synergies which are expected to further enhance free cash flow.” The purchase will boost the company’s total production over the next 12 months by 84% to 18,470 barrels per day. Meanwhile net operating income will improve 70% over the period to $75m.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Somero Enterprises, Inc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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