AUCTUS ON FRIDAY - 02/07/2025
AUCTUS PUBLICATIONS________________________________________
Arrow Exploration (AXL LN/CN)C; Target price of £0.80 per share: Appraisal drilling results at Alberta Llanos unlock full field development with horizontal wells - Following the discovery well, Arrow has drilled two new vertical wells at Alberta Llanos, effectively delineating the field. The AB-2 well at the far northern limit of the field encountered multiple hydrocarbon-bearing intervals with good reservoir characteristics but came in structurally lower than anticipated, resulting in sub-economic oil rates from the Carbonera sandstones. Additional zones can be completed at a later stage. The AB-3 well at the extreme south of the field encountered four oil-bearing sands: the Carbonera C7, Guadalupe, Gacheta, and Ubaque, totalling approximately 96 feet of oil pay. The well is currently producing 580 bbl/d gross (290 bbl/d net) of 13.6° API oil with a 9% water cut from the Ubaque. The results of the appraisal program at Alberta Llanos confirm the potential to develop the field with approximately six horizontal wells spaced 300 feet apart, starting later in 2025. Production in January was over 4,500 boe/d (4,899 boe/d in December) including contributions from AB-3 and AB-1, with production expected to increase with the back-to-back drilling of new horizontal wells from February. We continue to expect over 7,000 boe/d by year-end 2025. The FY25 exploration programme (excluding Alberta Llanos) is targeting ~10 mmboe prospective resources with an aggregate unrisked NAV of £0.51 per share.
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Panoro Energy (PEN NO)C; Target price of NOK46 per share: Reaching 13 mbbl/d net production – 4Q24 WI production was 12,052 bbl/d. While this is in line with our expectations, we note that gross production in Gabon has been stable at ~40 mmbl/d since November. This represents ~7 mbbl/d net to Panoro’s WI. Panoro’s corporate production has reached 13 mbbl/d in November. There is potential to increase spot gross production in Gabon to 44 mbbl/d, which is 10% above the nameplate capacity, without any incremental capital expenditure. Incorporating maintenance, we assume a run rate of 38,000 to 40,000 bbl/d. 4Q24 production in Tunisia reached 1,491 bbl/d, a 10% increase compared to 3Q24. Additionally, the El Ain-3 well was brought back online at around 200 bbl/d following a workover in January, after being shut-in since March 2024. With Dussafu at plateau production and the refinancing of its debt completed, Panoro has become a stable production company with substantial free cash flow and significant exploration upside. The current dividend yield for 2024 is now over 7%. With US$73 mm in cash at year-end 2024 and over US$100 mm in free cash flow expected in 2025, we believe the dividend could be increased further. From May 2024 to January 2025, Panoro also repurchased 1.6% of the company's share capital. Drilling at the Bourdon prospect in Gabon is ongoing. Results are expected during 1Q24. Our unrisked value for the prospect is >NOK4 per share.
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Pulsar Helium (PLSR LN/CN)C; Target price of £0.80 per share: Jetstream #2 results confirm ~1,000 m of reservoir with elevated helium readings – The Jetstream #2 well encountered elevated helium values over a gross vertical thickness of 3,178 feet (969 m), with samples from mud log gas containing up to 3.5% helium. The gross thickness with elevated helium is consistent with what was encountered at the Jetstream #1 well, which had a gross vertical thickness of 1,021 m. The actual helium concentration is expected to be higher than the measurements from the mud log gas. This is because the gas samples are diluted by atmospheric air due to the rotary air drilling method used, where air is forced into the well by compressors. Uncontaminated samples for laboratory analysis will be acquired. The helium concentration of 3.5% in the mud log gas samples at Jetstream #2 is difficult to compare with the 7.2% concentration observed in the mud log gas samples taken in the deeper section of the Jetstream because the respective amounts of dilution caused by the drilling is unknown. The Jetstream #2 well, located 200-300 m away from Jetstream #1, confirms the continuity and consistency of the helium-rich formation and the quality of the reservoir. This is an important step in de-risking the lateral extent of the reservoir and converting prospective resources into the contingent category.
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Vaalco Energy (EGY LN/US)C; Target price of US$10 per share: Kicking off FPSO refurbishment project in Cote d’Ivoire – In alignment with the project timeline, the FPSO Baobab Ivoirien MV10 ceased hydrocarbon production as scheduled on January 31, 2025. The vessel is set to be wet towed to shipyards in Dubai for refurbishment upon its departure from the field on March 24, 2025. This FPSO refurbishment is one of Vaalco's most significant projects for 2025, enabling production to continue until at least 2038. Initial production following the field's restart is expected to surpass 2024 levels.
IN OTHER NEWS
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AMERICAS
Alvopetro Energy (ALV CN): Operational update in Brazil. Strategic entry in Canada – Production in January was 2,457 boe/d. Operations at the 183-B well have been abandoned following the loss of the bottom hole assembly. Alvopetro is funding 100% of two earning wells at an estimated total cost of C$4.5 mm in exchange for a 50% WI in 19.13 sections (12,243 acres) of land in western Saskatchewan from Durham Creek Energy.
Galp Energia (GALP LI): 4Q24 update – 4Q24 production in Brazil was 110 mboe/d.
Predator Oil & Gas (PRD LN): Raising new equity for Trinidad and Morocco – Predator is raising £2 mm of new equity priced at £0.04 per share.
PTT: Exiting Mexico – Petronas is relinquishing its stake in Blocks 12 and 29.
ASIA AND AUSTRALASIA
Seascape Energy (SEA LN): Outlook in Malaysia – Seascape estimates that the company will hold approximately US$12 mm in cash upon completion of the farm-in transaction in Malaysia with INPEX. FDP for the DEWA cluster could unlock 85-100 bcf of resources net to the company.
EUROPE
Equinor (EQNR NO): 4Q24 results – Adjusted net income over the period was US$2.29 bn with production averaging 2,072 mboe/d. YE24 proved reserves were estimated at 15.6 bnboe (YE23: 15.7 bnboe). The 4Q24 quarterly dividend has been set at US$0.37 per share (3Q24: US$0.35 per share). Equinor has announced a US$5 bn share buyback programme for 2025. Production is expected to increase by more than 10% from 2024 to 2027, with 2025 production anticipated to be 4% above 2024 levels. FY25 capex is estimated at US$13 bn.
Hartshead Resources (HHR AU): New offtake route for UK gas project – Gas from the Anning and Somerville fields is now expected to be exported through the CalEnergy Resources-owned Saturn Banks pipeline system. It will be transported to the Perenco-owned Bacton Terminal, where the gas will be processed before entry into the UK grid. This arrangement is expected to reduce development costs.
OMV (OMV AG): 4Q24 results – 4Q24 adjusted income was EUR555 mm. FY25 production is expected to be ~300 mboe/d with overall capex of EUR3.6 bn.
TotalEnergies (FP FP): 4Q24 results – Adjusted net earnings for the period were US$4.4 bn with production averaging 2,427 mboe/d. The company has declared a final dividend of EUR 0.85 per share, representing a 7% increase for the FY24 dividend compared to FY23. FY25 production is expected to increase by more than 3% compared to 2024. FY25 net investments are estimated at US$17 to US$17.5 bn.
MIDDLE-EAST AND NORTH AFRICA
DNO Energy (DNO NO): 4Q24 results – FY24 net production was 77,300 boe/d, to which Kurdistan contributed 59,000 boe/d, North Sea 15,200 boe/d and West Africa 3,100 boe/d. YE24 net cash was US$99 mm. FY25 capex and abandonment costs are estimated at US$460 mm
SUB-SAHARAN AFRICA
Africa Oil (AOI SS/CN)/TotalEnergies(TTE FP)/Impact Oil & Gas: Drilling update in Namibia – The Tamboti-1X exploration well has encountered black oil within 85 metres of net reservoir of lower quality Upper Cretaceous sandstones, belonging to the Mangetti fan system. The well is not commercial. The Marula-1X exploration well has been spudded in the southern part of Block 2913B. This well will target Albian-aged sandstones within the Marula fan complex and has the potential to unlock further exploration targets across the south, an area at the heart of the prolific Kudu source-rock kitchen. At the end of 2025, the drilling rig is expected to drill the Olympe prospect, targeting Albian sands within a structural closure on Block 2912.
EVENTS TO WATCH NEXT WEEK
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11/02/2025 – bp (BP LN): 4Q24 results
11/02/2025 – Var Energi (VAR NO): 4Q24 results
4Imprint Group is a direct marketer of promotional products in the U.S., Canada, the U.K. and Ireland. Co. sells a range of promotional products including merchandise custom printed with the logo or name of an organization with the intention of promoting a brand, service, product or event. Co.'s product range comprises of individual products ranging from basic giveaways such as pens, bags and drinkware to items such as embroidered apparel, business gifts and full size trade show displays.
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.
DNO is a Norwegian exploration and production company focused on the Middle East and North Africa. Co. holds stakes in oil and gas blocks in various stages of exploration, development and production, both onshore and offshore, in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland.
Equinor is engaged in oil and gas exploration and production activities. Co. is primarily focused on exploration, development and production of oil and gas on the Norwegian continental shelf (NCS). Co.'s operations are organized into four segments. The Development and Production Norway and Development and Production International segments explore, develop, produce and extract crude oil, natural gas and natural gas liquids. The Marketing, Processing and Renewable Energy segment markets, trades, transports and processes oil and natural gas and renewable energy. The Other segment consists of global well and project delivery, research and develpoment, and business development.
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.
OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
Panoro Energy is an international independent oil and gas company engaged in the exploration and production of oil and gas resources in Brazil and West Africa. In Brazil, Co. participates in a number of oil and gas licenses located in the Santos basin outside the south-east coast of Brazil and in the Camamu-Almada basin in the state of Bahia. In West Africa, Co. participates in a number of licences in Nigeria and Gabon. As of Dec 31 2013, Co.'s commercial production is from the Manati field in Brazil.
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.
Total is an international integrated oil and gas company also active in solar and biomass energy sources. Co. engages all aspects of the petroleum industry, including Upstream operations (oil and gas exploration, development and production, and LNG (Liquefied Natural Gas)) and Downstream operations (refining, petrochemicals, specialty chemicals, marketing and marketing and trading and shipping of crude oil and petroleum products). In addition, Co. is engaged in the coal mining and power generation sectors. Co.'s worldwide operations are conducted through three business segments: Upstream, Refining & Chemicals, and Marketing & Services.
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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