AUCTUS ON FRIDAY - 21/03/2025
AUCTUS PUBLICATIONS________________________________________
Chariot (CHAR LN)C; Target price of £0.10 per share: Significant power transaction highlights the value of the S. Africa electricity trading business – Etana Energy, the South African electricity trading business (49% held by Chariot) has arranged a US$55 mm guarantee finance facility through Standard Bank and secured an equity investment of up to US$20 mm from Norfund for working capital. In exchange, Standard Bank and Norfund will hold 10% and 20% of the project’s economics, respectively, via preferred equity. This leaves Etana with 70%, equating to ~34.7% net to Chariot. The US$20 mm preferred equity investment predominantly from Norfund values Etana at ~US$100 mm, translating to ~US$34 mm net to Chariot or £0.022/sh. Etana has also signed a 20-year PPA for the entire supply from the 75 MW Du Plessis Dam PV2 solar project in South Africa. The agreement’s counterparty, Mulilo, will construct the plant and oversee electricity generation. The project has achieved financial closure, all necessary permits are secured, and construction is set to commence in 2Q25. Mulilo is a prominent renewable energy developer and independent power producer in South Africa. The company’s development pipeline exceeds 40 GW, and it operates 420 MW of wind and solar capacity. This transaction underscores the growing value of Chariot’s power operations in South Africa and solidifies Etana’s credibility as a reliable counterparty for future projects. As we add the value of Etana to our valuation, we are increasing our target price to £0.10/sh.
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Condor Energies (CDR CN)C; Target price of C$5.60 per share: 4Q24 results and reserves update in Uzbekistan – YE24 2P reserves in Uzbekistan were estimated at 18.5 mmboe. 4Q24 production was 10,5114 boe/d increasing to 12,019 boe/d in March to date and 12,288 boe/d over the past five days. In March, Condor signed a non-binding letter of intent outlining the basic terms and conditions for the purchase of a modular LNG facility capable of producing 48,000 gallons per day.
Criterium Energy (CEQ CN)C; Target price of C$0.35 per share: Replacing 160% of FY24 oil production. Gas contingent resources increased by ~40% – At YE24, Criterium was estimated to hold 4.6 mmbbl 2P oil reserves, a slight increase from estimated YE23, as the reserves additions from the work-over program (especially the new GH sand) more tan offsets FY24 production of approximately 0.3 mmboe. The after-tax NPV10 of the 2P reserves is US$60 mm. The 2C contingent gas resources at Tungkal are estimated at 27.5 bcf, higher than the previous estimate of 20 bcf. The auditor has attributed a 90% chance of development to Southeast Mengoepeh (2C resources of 14.9 bcf). The 12.6 bcf at Macan Gedang currently carries a 30% chance of development as the development is "unclarified." As a development plan gets submitted to the auditor, the chance of development is expected to increase to 90%. Macan Gedang is anticipated to come onstream in late 2026 or early 2027. Once Southeast Mengoepeh is onstream in 1Q26, Criterium will re-enter or twin the Cerah-1 well. The previous well encountered gas shows in the Gumai formation but was not tested at the time due to low gas prices and lack of available infrastructure. It was plugged and abandoned and is only 450 meters deep. The prospect is estimated to hold 7.4-93.4 bcf recoverable resources (best case of 26.2 bcf) with a 45% chance of geological success. The NW Cerah and Berkas prospects could add a further 8.4-77 bcf prospective resources (best case of 24.8 bcf) with a geological chance of success of 25-30%. As we incorporate the new reserves and gas contingent resources, we are increasing our target price from C$0.30 per share to C$0.35 in line with our ReNAV.
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PetroTal (PTAL LN/TAL CN)C; Target price of £1.30: Very high production YTD. Re-iterating FY25 guidance– FY24 production figures had been previously disclosed. The total cash position of $114.5 mm, of which $102.8 mm was unrestricted, is in line with previous indications. The minimal working capital deficit of US$1.5 mm is also in line with our expectations. YTD 2025 oil production has averaged 23,200 bbl/d, comprising 22,600 bbl/d from the Bretana field and 600 bbl/d from the Los Angeles field. This exceeds our forecast of 21.5 mbbl/d as the two last wells at Bretana have delivered very strong performance. The 22H well averaged 4,500 bbl/d during its first 30 days onstream, while Well 23H (brought online for production testing in the last week of February) is flowing naturally at an average of 3,500 bbl/d over its first ten days onstream. The company has re-iterated its FY25 production guidance of 21,000 bbl/d to 23,000 bbl/d with US$140 mm capex. Drilling at Los Angeles is expected to start in early 2H25. with ongoing negotiations regarding Block 131 terms that could positively impact asset value and the associated spending program. At the current share price, the expected FY25 dividend yield is greater than 13%. In addition we believe that the company’s 2P reserves support a production growth of 20-25% in 2026.
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Sintana Energy (SEI.V CN)C; Target price of C$1.80: Woodside does not farm-into PEL 87 – Opportunity for equity investors – Woodside has elected not to exercise its option to farm into PEL 87. While this decision is disappointing and likely to result in some delays until Pancontinental secures a new partner, it likely reflects Woodside’s increased focus on LNG and its recent reduction in exploration spending. The company is currently advancing three capital-intensive development projects: Scarborough LNG (7.3 Tcf, ~80% complete), Trion Oil (20% complete), and the recently acquired Louisiana LNG expansion. PEL 87 remains the sole block in the core area of the Orange Basin without a major operator. Pancontinental is already in discussions with new potential farm-in partners. In January, Pancontinental announced upgrades to two primary exploration leads in the Saturn Complex - Oryx and Hyrax - both showing AVO anomalies. Pancontinental is now evaluating the prospective resources and the chance of success for each lead. The current exploration period for PEL 87 expires in January 2026 but can be extended and renewed. Obligations during this period are manageable, requiring either one well, 500 km² of 3D seismic, or 1,000 km of 2D seismic. The 3D commitment is significantly smaller than Woodside’s previous 6,600 km² seismic campaign, which cost over US$30mm. In any case, Sintana is carried by Pancontinental through to FID. In light of the uncertainty surrounding a new farm-in partner, we have increased the risk factor associated with PEL 87 and changed our target price to C$1.80/sh. However, we view the current share price weakness as an opportunity. The current market cap represents only 40% of our valuation (net of capital gains tax) for Sintana’s interest in the Mopane discovery.
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Southern Energy (SOU CN/SOUC LN)C; Target price of £0.35: Back to growth – Southern is expecting to raise US$6 mm in new equity at a price of 4.3p/sh (C$0.08/sh). Investors participating in the transaction will also receive half a warrant for each new share, with an exercise price of 5.3p/sh (C$0.10/sh). The existing ~US$3.2 mm convertible debenture will be equitized, at 102.5% of the principal outstanding amount plus accrued interest will be converted into equity at a price of 4.3p/sh (C$0.08/sh). Southern's credit facility has been amended, reducing monthly principal amortization payments to ~15%/y, and revising certain covenant calculations. The additional capital will enable Southern to capitalize on the rising US gas price and boost production and reserves. The FY25 ~US$10 mm capex programme will include (1) the completion of the three drilled and uncompleted (DUC) wells, drilled in 1Q23 at Gwinville and (2) the drilling of two vertical Cotton Valley wells at Mechanicsburg. Each DUC is expected to have an IP30 rate of ~5.5 mmcf/d with an expected EUR of ~3.5 bcf. The Mechanicsburg wells will increase the liquid weighting of the company's production, with an IP30 rate of ~4.2 mmcf/d plus 75 bbl/d and an EUR of 3.7 bcfe. Overall, Southern is forecasted to produce ~4.0 mboe/d in 2026, up from ~2.2 mboe/d. We assume that new wells will be drilled according to available cash flow to reach >7 mboe/d by YE28 with debt levels remaining stable. Southern is selling its gas at a ~ 15% premium (adding ~US$0.6-0.7/mcf). Higher gas prices or additional capital would enable Southern to accelerate production growth. We have changed our target price to £0.35/sh to reflect the new capital programme and the equity transaction.
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Vaalco Energy (EGY US/LN)C; Target price of US$10: Two large projects to boost FY26 production – 4Q24 production was 25,300 boe/d; which is in line with our expectations. The YE24 WI 2P reserves were estimated at 96.1 mmboe) Adjusting for the acquisition of the Ivory Coast assets, the company has organically replaced over 100% of the FY24 production of ~9 mmboe. This exceeds our expectations and reflects the strong performance of Vaalco’s various assets. Vaalco expects to produce 19.3-22.3 mboe/d in 2025 with a capex of US$270-300 mm. The guidance is below our forecast of 24.9 mbbl/d, which assumed the earlier contributions from new wells in Gabon. FY25 WI production in Gabon is expected to average 7.0-8.3 mbbl/d (4Q24: 8.6 mbbl/d). Drilling in Gabon is expected to start around August, with only two new wells expected to add production by YE25. The drilling campaign will continue with an additional three wells plus two work-overs to be drilled from early 2026, with the option to drill five more wells later that year. Ivory Coast and Gabon each represent 40-45% of the total capex program. Production in Côte d’Ivoire is expected to resume in 2Q26, with back-to-back drilling assumed from that point. In Egypt, Vaalco has fractured a new well at South Ghazalat, which could derisk further resources. The FID for Venus (Equatorial Guinea) could be taken later in 2025. For now, we forecast ~28 mboe/d production in 2026. Including contributions from Equatorial Guinea from 2028, production could exceed 35 mboe/d by then. The dividend yield is ~5.8%.
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IN OTHER NEWS
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AMERICAS
Alvopetro (ALV CN): FY24 results – Sales in Brazil averaged 2,375 boe/d in January and February 2025. YE24 net working capital surplus was US$13.2 mm.
Canacol Energy (CNE CN): Reserves update in Colombia – YE24 2P reserves were estimated at 105 mmboe (-1.4% vs. YE23). 4Q24 sales volumes were 158 mmcfe/d. YE24 net debt was US$683 mm.
Diversified Energy (DEC US/LN): FY24 results – FY24 production was 132 mboe/d. YE24 reserves were estimated at 4.5 tcfe. The company expects to produce 1.05-1.1 bcfe/d in 2025 with US$165-185 mm capex. Net debt at YE24 was US$1.6 bn.
Touchstone Exploration (TXP LN/CN): FY24 results – 4Q24 production in Trinidad was 5,287 boe/d. YE24 net debt was US$29.1 mm. Sales volumes in February 2025 were 4,274 boe/d. During the same month, Cascadura-3ST1 produced ~90 bbl/d of total fluid with a 47% oil cut.
ASIA AND AUSTRALASIA
Jadestone Energy (JSE LN): FDP for Vietnam gas submitted – Jadestone has submitted a field development plan for the Nam Du/U Minh discoveries offshore southwest Vietnam to Petrovietnam.
EUROPE
BlueNord (BNOR NO): Reserves update in Denmark – YE24 2P reserves were estimated at 194 mboe (YE23: 186 mmboe).
Turkey: Continental Resources enters unconventionals – Continental Resources has signed a JV deal with Türkiye Petroleum and TransAtlantic Petroleum to explore tight rock in the Diyarbakir Basin and Thrace Basin.
FORMER SOVIET UNION
Block Energy (BLOE LN): Acquisition in Georgia – Georgia has confirmed Block's operational rights to the Upper Eocene, Lower Eocene and Upper Cretaceous in the Samgori South Dome field. As a result, resources for Project III increase with the addition of 574 bcf 2U unrisked prospective resources to the existing 2.7 tcf 2C contingent resources.
MIDDLE EAST AND NORTH AFRICA
Energean (ENOG LN): Asset divestment terminated. FY24 results - The divestment of Energean’s assets in Italy, Egypt and Croatia has been terminated. FY24 production was 153 mboe/d. YE24 2P reserves were estimated at 1,058 mmboe (-5% vs. YE23) including 911 mmboe for continuing operations. YE24 net debt was US$2.9 bn. Production in 2025 to the end of February was 160 mboe/d including 115 mboe/d for continuing operations. The company expects to produce 120-130 mboe/d at its continuing operations in 2025.
Genel Energy (GENL LN): FY24 results – FY24 production in Kurdistan was 19.7 mbbl/d. YE24 net cash was US$131 mm.
Gulf Keystone Petroleum (GKP LN): FY24 results – FY24 gross oil production in Kurdistan was 40,689 bbl/d increasing to 46,400 bbl/d in 2025 YTD. YE24 2P reserves were estimated at 443 mmbbl (YE23: 458 mmbbl). YE24 net cash was US$115 mm. The company expects to produce 40-45 mbbl/d in 2025 with net capex of US$25-30 mm.
Predator Oil & Gas (PRD LN): Exploration drilling results in Morocco – The top of the Domerian carbonate primary target was encountered significantly deeper than prognosed due to the presence of mobilised salt above. Helium shows were encountered 16 m above the primary target. Below the Domerian carbonate the well unexpectedly encountered approximately 30 metres of good quality gross sand that had never been seen before in the Guercif Basin.
Serinus Energy (SENX LN): FY24 results – FY23 production was 555 boe/d including 500 boe/d in Tunisia and the balance in Romania. The company had a working deficit of US$9.3 mm at YE24 (US$5.6 mm at YE23).
SUB-SAHARAN AFRICA
Africa Oil (AOI CN/SS): Merger consolidation of Prime. New guidance – The merger with Prime has been completed. The company expects to produce 28-33 mboe/d in 2025 with US$150-190 mm capex. A quarterly dividend of US$25mm has been declared with a target to distribute at least US$100 mm annually.
Eni (ENI IM): Selling assets to Vitol – Eni is selling 30% interests in the Baleine project in Ivory Coast and 25% interests in Congo LNG for US$1.65 bn with a effective date of 01/01/2024. Current production at Baleine exceeds 60,000 boe/d. Congo LNG currently produces 1 bcm per year of LNG.
Pancontinental Energy (PCL AU): Prospective resources update in Nambia – The Saturn complex is estimated to hold 1.6 bn bbl gross recoverable resources over 8 prospects with chances of success ranging from 17.8% to 22.5%. The two largest prospects, Oryx and Hyrax are each estimated to hold 534 mmbbl recoverable resources.
EVENTS TO WATCH NEXT WEEK
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25/03/2025 – Shell (SHEL LN): Capital Market Day
25/03/2025 – Tullow Oil (TLW LN): 4Q24 results
26/03/2025 – bp (BP LN): Capital Market Day
26/03/2025 – Ithaca Energy (ITH LN): 4Q24 results
26/03/2025 – Pharos Energy (PHAR LN): 4Q24 results
27/03/2025 – EnQuest (ENQ LN): FY24 results
3-D Matrix is engaged in the developing businesses consisting of research reagents, medical devices, and licensing based on various rights associated with self-assembling peptide technologies. Co. develops feasible technologies in the fields of regenerative medicine, surgical treatment, cell therapy, and drug discovery. Co.'s core-technology, self-assembling peptide "PuraMatrix" consists of an amphipathic peptide that forms nanofibers from the change in pH or the response to inorganic salts contained in solutions. Co.'s principal products include "PuraMatrix," "High Concentration PuraMatrix," "Modified Peptide" and "GMP Grade PuraMatrix."
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.
Block Energy plc, formerly Goldcrest Resources plc, is an oil and gas company. The Company's projects include norio onshore oil field, east kavtiskhevi (block VIII), akoko asheba gold project and Mauritania copper. Norio project is 35 kilometres from the centre of Tbilisi, requiring low capex recompletions of existing wells and new horizontal wells, to existing production. East kavtiskhevi (block VIII), which consist 36.9 MMbbl risked resources in Cretaceous, 4,700 kilometers area and multiple prospective horizons. Asheba project is located at the southern end of the Ashanti belt 15km east of Endeavour Mining's Nzema mine and 30 kilometers south of the world class Tarkwa mine. At Asheba, mineralisation is centered on the old Cheriamen and Atinasi mining sites within multiple parallel steep dipping zones associated with intense silicification, disseminated pyrite and a stockwork of quart veinlets. Mauritania project is an exploration concept.
Chariot Oil & Gas is an independent oil and gas exploration company focused offshore in West Africa with a portfolio of assets located in the under-explored regions of Namibia, Mauritania and Morocco.
Continental Resources is an independent crude oil and natural gas company engaged in the exploration, development, and production of crude oil and natural gas mainly in the North, South and East regions of the U.S. The North region consists of properties north of Kansas and west of the Mississippi River and includes North Dakota Bakken, Montana Bakken, and the Red River units. The South region includes all properties south of Nebraska and west of the Mississippi River including various plays in the South Central Oklahoma Oil Province and Sooner Trend Anadarko Canadian Kingfisher areas of Oklahoma. The East region is comprised of undeveloped leasehold acreage east of the Mississippi River.
Diversified Gas & Oil is an Appalachian Basin focused natural gas and crude oil operations company.
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.
Genel Energy is a holding company. Co. is principally engaged in the business of oil and gas exploration and production. Co. has three segments: Oil, which is comprised of the producing assets, Taq Taq and Tawke, which are located in the Kurdistan Region of Iraq (KRI) and makes predominantly all sales to the Kurdistan Regional Government; Gas, which is comprised of the upstream and midstream activity on Miran and Bina Bawi also in the KRI; and Exploration, which is comprised of its exploration activity, principally located in the KRI, Somaliland and Morocco. As of Dec 31 2016, Co. had proved plus probable working interest reserves of 161.0 million barrels of oil equivalent.
Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.
Pancontinental Oil & Gas is engaged in exploration for oil and gas properties in Kenya and Namibia. Co. is in joint venture over an offshore area in the Walvis Basin, Namibia and holds an interest in the L6 block onshore/offshore Kenya.
Predator Oil & Gas Holdings PLC seeks to consolidate the acquisition of a specific non-operated oil and gas business opportunity in the Republic of Trinidad and Tobago, to generate income for Co., and exploration and appraisal assets in the Licensing Options offshore Ireland that form an existing operating business operated by POGV. Both businesses are consistent with Co.'s focus on responsible, environmentally aware, investment in the fossil fuel industry.
Serinus Energy is engaged in the exploration for and development of oil and gas properties in Ukarine, Brunei and Syria.
Sintana Energy is a development stage company engaged in oil and gas exploration and development activities in the United States.
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.
VAALCO Energy is an independent energy company engaged in the acquisition, exploration, development and production of crude oil. The company is primarily engaged in its Etame Production Sharing Contract related to the Etame Marin block located offshore the Republic of Gabon in West Africa. The company also owns interests in an undeveloped block offshore Equatorial Guinea, West Africa.
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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