AUCTUS ON FRIDAY - 18/10/2024
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Criterium Energy (CEQ CN)C; Target price C$0.35 per share: Encouraging drilling results. Decreasing opex – Production to date in October is 950 bbl/d, the same level as reported on 24 September. The MGH-43 well has encountered 41 m of prospective gross sand intervals with good to excellent oil shows in the main TAF target that will now be perforated. Due to unstable hole conditions in MGH-43, Criterium was unable to conduct pressure testing and resistivity calculations on the zones of interest and therefore could not determine the estimated productivity rates. The well will be put in production at the end of October. In addition to the 41 m of potential sands to be perforated, the deeper lower CL zones demonstrated good oil shows during drilling. However, the production casing could not be set at this depth and this zone will not be produced in this well. 13 m of net gas pay was encountered in the shallower Gumai formation. This is a positive surprise. The Gumai zone is present throughout the MGH field and has indications of hydrocarbons but has not been tested. The associated potential resources are not included in the prospective and contingent resources estimated by the resources auditor and this could offer some upside. Criterium is currently evaluating how this discovery could complement the SE MGH gas development. The second well of the campaign will be drilled once the production rate of MGH-43 is established. As production has increased, opex per barrel has dropped from US$40/bbl in 2Q24 to US$34/bbl in 3Q24. Completing the divestment of Bulu for US$7.75 mm continues to be expected in 4Q24. This would allow the company to reduce its debt and/or accelerate its drilling programme. Further visibility on the gas development plan could also start to unlock C$0.17 per share of value.
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Pulsar Helium (PLSR CN)C; Target price £0.90 per share: Raising new equity and starting trading on AIM – Pulsar has raised £5 mm of new equity at a price of £0.25 per share. The company starts trading on AIM today. The company’s key asset is the Topaz project in Minnesota where the company has discovered a structure holding ~1.4 bcf contingent plus prospective resources (Pmean) of high concentration helium. The structure is also estimated to hold prospective CO2 resources of 10.7 bcf (Pmean). The Jetstream #1 flowed at a rate of up to 0.8 mmcf/d with helium concentrations of 8.7-14.5% on test. The flow rate was constrained by the compressor used during the operation not being sufficient to further reduce the well head pressure. The new funding will allow the well to be deepened and further tested to derisk some of the prospective resources before the end of the year. A step-out well could also be drilled in 1Q25 to firm-up the resources. A FEED study will then be undertaken to size the development of the discovery that could start shortly thereafter. Our unrisked NAV for the contingent plus prospective helium is £1.88 per share plus £0.80 for the CO2 resources (Pmean in both cases). A recently acquired land position provides Pulsar with further prospectivity beyond the area covered by the recent competent person report (CPR). The 1.3 bcf prospective resources estimated in the CPR include the proportion of the identified structure on adjacent State lands over which Pulsar is in discussions to secure access.
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Zephyr Energy (ZPHR LN)C; Target price £0.13 per share: Borrowing base redetermination. Lower interest rates – The redetermination process reaffirmed the total collateral value of Zephyr's non-operated asset portfolio and resulted in no change to the amount available under Zephyr's existing US$15.15 mm RCF. In addition, the interest rate on the RCF has been reduced to 10% per annum (from 11% per annum). Zephyr’s total borrowings are ~US$27.4 mm. The lower borrowing rates on the RCF result in a lower blended interest rate of 9.1% per annm (instead of 9.5%) over the total debt. This results in a overall reduction in annualised interest cost of ~US$0.15 mm per year.
IN OTHER NEWS
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AMERICAS
Galp Energia (GALP LS): 3Q24 update in Brazil – 3Q24 production was 125 mboe/d including 116 mboe/d in Brazil.
Trinity E&P (TRIN LN): 3Q24 update in Trinidad – 3Q24 production was 2,471 bbl/d. Net debt at the end of September was US$5.2 mm.
ASIA PACIFIC
Georgina Energy (GEX LN): Resources upgrade in Australia – The estimated prospective resources at EP513 Hussar have been increased by ~20% including ~1.91 tcf of hydrocarbons, 196 bcf of helium and 205 bcf of hydrogen.
Mosmam Oil & Gas (MSMN LN): Mosmam is acquiring 75% WI in EP-145 from Greenvale Energy for A$0.25 mm. EP-145 is estimated to hold 26.4 bcf of helium and 26.4 bcf of hydrogen.
Woodside Energy (WDS AU/:N): 3Q24 update. Delisting from London – 3Q24 production was 577 mboe/d. The FY24 production guidance has been narrowed to 189-195 mboe/d with US$4.8-5.2 bn capex (US$5.2-5.5 bn previously). Woodside has decided to delist its shares from the LSE.
EUROPE
Aker BP (AKER BP NO): 3Q24 update in Norway – 3Q24 production was 414.7 mboe/d.
Europa Oil & gas (EOG LN)/Union Jack Oil (UJO LN): Challenge to development approval in the UK – The North Lincolnshire Council has been informed that the decision to grant planning permission for an extension to the Wressle well site will be challenged. The companies will not be in a position to defend the proposed legal claim. As such it is fully expected that the planning consent will be quashed once the court process has concluded.
ExxonMobil (XOM US): Legal action against Netherlands – ExxonMobil has launched a legal action against Netherlands over the early closure of the Groningen gas field.
Japex: Looking to sell UK asset? –Media reports indicated that Japex was looking to sell its stake in the Seagull field.
Rockhopper (RKH LN): Insurance for trial in Italy and asset disposal – Rockhopper has bought an insurance policy in the event that the Italian Republic succeeds in having the entire Ombrina Mare arbitration award annulled or in the event of partial annulment. Under such an outcome, the insurance would pay Rockhopper a total of at least EUR31 mm. The total cost of the policy is EUR4 mm. Rockhopper is also selling all its Italian assets and liabilities in Italy with the exception of the Ombrina Mare arbitration award to Zodiac. Rockhopper will pay EUR5.5 mm to Zodiac in two instalments (EUR3 mm + EUR2.5 mm), with a retained upside participation to Rockhopper in two undeveloped licences. The payment second instalment (EUR 2.5 mm) is conditional on Rockhopper receiving a minimum of EUR10 mm from the Ombrina arbitration award. Rockhopper will retain a 10% royalty on the AC19 and Serra San Bernardo assets. Following the completion of the transaction, Rockhopper’s P&A liability will have been reduced by US$15 mm.
MIDDLE EAST AND NORTH AFRICA
Tag Oil (TAO CN): Operating update in Egypt/Acquisition –. Production at the T100 well is averaging 200 bbl/d of fluid including 35% of water. Tag is farming into a 2,000 km2 asset in the Western Desert. Of specific interest is the unconventional ARF oil formation that is present covering a large portion of the targeted concession with indications of very good ARF reservoir properties, similar to the BED-1 concession. The area has excellent coverage of 2-D and 3-D seismic and contains several producing and available oil wells with upside potential for completion and production optimization in conventional light oil reservoirs.
SUB-SAHARAN AFRICA
Tower Resources (TRP LN): More details on potential farm-out in Camerron. Raising new equity – Tower is raising £1.19 mm of new equity priced at 0.027 p per share. This represents a discount of 22.9% to the price prior to the announcement. Tower has received a more detailed proposal from a potential farm-in partner. The counterparty would now provide in excess of US$15 mm of funding for the Thali PSC work programme, including drilling the NJOM-3 well, in return for a minority interest in the PSC. It also provides for future production-based payments to the company.
EVENTS TO WATCH NEXT WEEK
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25/10/2024: ENI (ENI IM) – 3Q24 results
Aker BP ASA engages in the exploration, development, and production of petroleum resources on the Norwegian Shelf. In addition, Co. has a separate Johan Sverdrup business unit to manage its interest.
Europa Oil & Gas is an exploration and production company focused on Europe. The principal activity of Co. and its subsidiaries (the Group) is investment in oil and gas exploration, development and production. The Group's assets and activities are located in Ireland and the U.K.
Exxon Mobil operates or markets products in United States and other countries through its divisions and affiliated companies. The company's business involves exploration for, and production of, crude oil and natural gas and manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and other products. In United States, the company's development activities are focused on the onshore United States, in the Permian Basin of West Texas and New Mexico and the Bakken oil play in North Dakota. Gas development activities are also focused on the Marcellus Shale of Pennsylvania and West Virginia, the Utica Shale of Ohio and the Haynesville Shale of East Texas and Louisiana.
Galp Energia is a holding company. Through its subsidiaries, Co. operates in the following segments: exploration and production, with activities relating to exploration, development and production of hydrocarbons, particularly in Angola, Brazil and Mozambique; refining and marketing, which owns refineries in Portugal and also includes activities relating to the retail and wholesale commercialization of oil products; and gas and power, which covers the purchasing, commercialization, distribution and storage of natural gas and electric and thermal power production. As of Dec 31 2014, Co. had proved and probable reserves of 638.0 million barrels of oil equivalent.
Mosman Oil and Gas is a New Zealand and Australia oil exploration and development company. Co. is engaged in examining resource opportunities in overlooked and emerging resource areas. Co. objective is to discover economic oil and gas reserves and realize value through the development, joint venture or sale of its oil and gas interests.
Rockhopper Exploration is an oil and gas exploration and production company with key interests in the North Falkland Basin and the Greater Mediterranean region.
Tower Resources is an oil and gas exploration company Co. is an operator of international licenses with a focus on projects in Africa. Co. has exploration projects in Cameroon, South Africa and Zambia. As of Dec 31 2016, Co. had interests in the following properties: a 50% interest in Algoa-Gamtoos, South Africa; a 100% interest in Thali PSC in the Rio Del Rey basin, offshore Cameroon; and a 100% interest in Block 40 & 41, Zambia. Co. has not yet commenced production.
Union Jack Oil is an onshore oil and gas exploration and production company with a focus on drilling, development, investment and production in the U.K. hydrocarbon sector.
Rose Petroleum is an oil and gas (O&G) and mining company with exploration assets and an operational crushing and flotation mill. Co.'s principal activities are the exploration and development of O&G resources together with the evaluation and acquisition of other mineral exploration targets, principally gold, silver, uranium and copper, and the development and operation of mines in Mexico. In Co.'s O&G division, the area of focus is on two unconventional oil and gas basins in the U.S.: the Uinta Basin and the Paradox Basin. In its mining division, Co. continues its milling operations through its subsidiary, Minerales VANE S.A. de C.V., which owns the SDA Mill in Mexico.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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