Auctus on Friday - 08/09/2023
AUCTUS PUBLICATIONS________________________________________
ADX Energy (ADX AU)C: target price of A$0.08 per share: Transaction with MND receives Austrian Ministerial acceptance – ADX has received clearance from the ministry of finance in Austria for the partnership documentation between ADX, MND and Xstate Resources. This was a key condition precedent to completing the transaction. The transaction will provide funding for the drilling of key wells at Anshof that are expected to add reserves and production. The clearance paves the way for a further transaction related to a gas exploration investment in a area within the ADX-AT-I licence.
Arrow Exploration (AXL LN/CN)C: target price of £0.55 per share: CN-3 encounters thick oil pay but flow test hampered by poor cement job – The CN-3 well encountered 67 feet of oil pay in two Ubaque zones plus 23 feet of oil pay in the C7 and 59 feet in the Lower Gacheta formations. The oil pay encountered in the Ubaque at CN-3 is thicker than at CN-2 (~60 feet). The characteristics of the reservoir are very good and similar to those encountered in the CN-1 and CN-2 wells. The Lower Ubaque zone was initially tested at 593 bbl/d of oil with a 30% water cut. The water cut subsequently increased and the test was terminated. The Upper Ubaque tested at 129 bbl/d of oil with 92% water cut and the test was also terminated. The unexpected water breakthrough is explained by a combination of (1) a poor cement job, (2) high reservoir quality and (3) the fact that the deepest perforations were only 50 feet above the oil water contact. The Lower Ubaque had only 65 feet of pay above the oil water contact. Arrow believes that some of the cement went into the formation (given the very high permeability) resulting in poor cement integrity as identified on the casing bond logs with the formation water channeling to the perforations. This did not happen at CN-1 or CN-2 as these wells were structurally higher with no visible oil water contact indicating an oil column of 115 feet from the top of the Ubaque to the oil water contact. The perforations were much further away from the oil water contact. The C7 formation will now be tested with results expected next week. Pending the results of this well test and the opening of the Ubaque zone at CN-1, we have not changed our forecasts.
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IN OTHER NEWS
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AMERICAS
Alvopetro Energy (ALV CN): Operation update in Brazil – Gas sales in August were 1,852 boe/d. The 183-A3 well on the Murucututu natural gas field encountered hole stability problems drilling the intermediate section within the Pojuca Formation in the intermediate 12 1/4" hole section. The well is being sidetracked.
Canadian Overseas Petroleum (COPL LN/XOP CN): Raising new equity – Canadian Overseas has raised US$3.5 mm of new equity at a price of 4p per share. The new equity is being issued to Anavio Capital.
Canacol Energy (CNE CN): Operational update in Colombia – August gas sales were 178 mmcf/d. Commencing the second week of August, Canacol experienced unusual and unexpected production capacity restrictions at some of its gas fields as a result of issues at the Jobo gas treatment facility as well as certain of its producing wells. Canacol has had to restrict gas deliveries under certain supply contracts dedicated to supplying non-essential gas demand.
Molecular Energies (MEN LN): Selling Argentina to main shareholder – Molecular Energies is selling Argentinian business to Peter Levine, its main shareholder for up to US$40 mm. The consideration includes (1) US$2 mm in cash payable on the date falling 12 months from completion of the sale, (2) the purchaser procuring the repayment of US$13 mm debt and interest owed by the Argentinian business to Molecular Energies and (3) a contingent consideration of up to 20% of the net free cashflow from the Argentinian business over the next five years.
Mosnam Oil & Gas (MSMN LN): Selling US asset - Mosman Oil and Gas has completed an evaluation on further workovers at Falcon-1 in the US, which has been shut in this year, and determined not to invest additional resources in this project. Mosman will transfer the Falcon lease to 84 Energy in exchange for the equipment on the lease. This means Mosman is not liable for potential future abandonment costs estimated to be up to US$200,000. In addition, the undeveloped Galaxie exploration lease has not been renewed and has expired with no liabilities.
Pantheon Resources (PANR LN): Raising new equity to fund bond repayment – Pantheon is raising US$2.793 mm of new equity priced at £0.1878 per share (being a 10% discount to the six day VWAP of the ordinary shares on AIM) to pay a quarterly bond repayment of the same amount.
Petrobras: Cancelling asset sales in Brazil – The divestment process of the Urucu and Bahia Terra areas has been cancelled.
Repsol (REP SM): Selling Canadian E&P assets – Repsol is selling its oil and gas assets in Canada with 23 mboe/d net production (mostly gas) to Peyto for US$468 mm.
Touchstone Exploration (TXP LN/CN): Starting production at gas field in Trinidad – Production at Cascadura has started. The Company intends to increase gross aggregate natural gas production from the Cascadura-1ST1 and Cascadura Deep-1 wells to 60 mmcf/d plus associated natural gas liquids over the coming weeks.
ASIA PACIFC
Jadestone Energy (JSE LN): Montara update– Production has increased to ~8,000 bbl/d. This figure includes some flush production, and it is expected that average Montara production will return to pre-shutdown levels of ~6,000 bbl/d over the coming days.
EUROPE
EnQuest (ENQ LN): 1H23 results – 1H23 production was 45,480 boe/d. At the end of June, EnQuest net debt had reduced to US$592.1 mm (YE22: US$717.1 mm). FY23 production is still expected to be within the guidance range of 42,000 boe/d to 46,000 boe/d. The company is delisting its shares from Stockholm.
Hibiscus Petroleum/Ping Petroleum: UK North Sea acquisition – Hibiscus and Ping are acquiring 42.5% (each) in Licence P2451 from Rapid Oil Production. The licence holds the undeveloped Fyne oil field, located in the Central North Sea, UK, with an estimated 75 mmboe STOOIP.
MIDDLE-EAST AND NORTH AFRICA
Energean (ENOG LN): 1H23 results – 1H23 production was 105.9 mboe/d. Net debt at the end of June was US$2.7 bn. The FY23 production guidance has been revised to 120 - 130 mboe/d (from 125 - 140 mboe/d), reflecting start-up issues in Israel that have now been substantially overcome. Production is expected to reach 200 mboe/d by 2H24.
Zenith Energy (ZEN LN/ZENA NO): Termination of acquisition in Yemen/MOU in Kazakhstan – The acquisition of OMV Yemen assets has been terminated. The company has signed an MOU to evaluate the potential acquisition of 600 bbl/d of production and 4 mmbbl of 2P reserves in Kazakhstan.
SUB-SAHARAN AFRICA
Eni (ENI IM): Selling onshore assets in Nigeria – Eni is selling Nigerian Agip Oil Company (NAOC) to Oando. NAOC holds interests across 4 onshore blocks (20% in OML 60, 61, 62, 63), in the Okpai 1 and 2 power plants (with a total nameplate capacity of 960MW), and in two onshore exploration leases (OPL 282 and OPL 135, respectively 90% and 48%). NAOC’s 5% participating interest in the Shell Production Development Company Joint Venture is not included in the perimeter of the transaction and will be retained in Eni’s portfolio.
Helium One (HE1 LN): Raising new equity for Tanzania – Helium One is raising £6.3 mm of new equity at a price of 6p per share. The net proceeds of the Fundraise will be used for drilling a second exploration well (Itumbula-C SE) on the Itumbula prospect.
EVENTS TO WATCH NEXT WEEK
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13/09/2023: Pharos Energy (PHAR LN) – 1H23 results
ADX Energy is engaged as an oil and gas exploration company. As of Dec 31 2015, Co. operated five oil and gas permits in North Africa and Europe, which under following projects: Kerkouane project located in Tunisia; Pantelleria project, Nilde project and Orlando project, which are located in Italy; and Romania project, which Co. held 50% interest on its project.
Alvopetro Energy is a resource company and is engaged in the exploration for, and the acquisition, development and production of, hydrocarbons in the Reconcavo, Tucano, Camamu-Almada and Sergipe-Alagoas basins in onshore Brazil. Co. develops producing hydrocarbons by appraising and developing existing discoveries and exploring in areas considered by management to be prospective for hydrocarbon resources. Co.'s assets consist of interests in three producing fields and 16 exploration blocks comprising 148,500 gross acres onshore Brazil.
Front Range Resources is engaged in oil and natural gas exploration and production focusing on horizontal multi-stage frac development in Montney, Bluesky, Wilrich and Falher formations in the Deep Basin area of west central Alberta.
Canacol Energy is engaged in core petroleum and natural gas exploration and development activities in Colombia, Brazil and Guyana.
Canadian Overseas Petroleum is engaged in the exploration and development of oil and gas in the United Kingdom North Sea.
Energean Oil & Gas PLC is an exploration and production (E&P) company that is focused on the Eastern Mediterranean region, where it operates in offshore Israel, Greece, the Adriatic and Egypt. The Company has 13 E&P licenses, and 16 wells. The Company has proven plus probable (2P) reserves of 50 million barrels (MMbbls) of oil and 6 billion cubic feet (Bcf) of gas and 2C resources of 22.9 MMbbls of oil and 11.5 Bcf of gas at its Prinos Basin and Katakolo fields, and its associate, Energean Israel, has 2C resources of 32.8 MMbbls of liquids and 2.4 trillion cubic feet (Tcf) of gas. The Company also has exploration potential in the other licences held in offshore Israel, Western Greece, and Montenegro.
Eni is engaged in the oil and gas exploration and production, gas marketing operations, management of gas infrastructures, power generation, petrochemicals, oil field services and engineering industries. Co.'s operations are divided into three segments; Exploration and Production (oil and natural gas exploration and field development and production, as well as LNG operations), Gas and Power (supply, trading and marketing of gas and electricity, managing gas infrastructures for transport, distribution, storage, re-gasification, and LNG supply and marketing), and Refining and Marketing (supply of crude oil, refining and marketing of refined products). Co. maintains operations in 73 countries.
Enquest is an oil and gas production and development company. As of Dec 31 2016, Co.'s principal U.K. assets were its interests in the producing operated oil fields Heather/Broom, Thistle/Deveron, the Dons area, the Greater Kittiwake Area, Alma/Galia and Scolty/Crathes. In addition, Co. had interests in the Kraken development and also a non-operated interest in the producing Alba oil field. In Malaysia, Co.'s operated assets comprise the PM8/Seligi Production Sharing Contract and the Tanjong Baram Risk Services Contract. At Dec 31 2016, Co. had proven and probable reserves of 215.0 million barrels of oil equivalent.
Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
Touchstone Exploration Inc., formerly Petrobank Energy and Resources Ltd., is an oil and gas exploration and production company. The Company's segments include Trinidad and Canada. The Company's core producing properties are located onshore within Trinidad. The Company's producing properties in Trinidad include Coora 1, Coora 2, New Dome, South Palo Seco, Barrackpore, Fyzabad, Icacos, Palo Seco and San Francique. The Company's exploratory properties in Trinidad include Bovallius, Moruga, New Grant, Ortoire, Otaheite, Piparo, Rousillac, Siparia and St. John. Its exploratory properties in Canada include Beadle, Druid, Luseland and Winter. The gross acres of the properties include approximately 106,604. The Company operates a total of approximately 370 wellbores on the Coora blocks. The New Dome block is located onshore in the southwest portion of Trinidad in the Ward of Siparia. The Barrackpore Block is located approximately 11 kilometers southeast of the city of San Fernando.
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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