Auctus on Friday - 04/08/2023
AUCTUS PUBLICATIONS________________________________________
ADX Energy (ADX AU)C; target price of A$0.10 per share: Growing production. New Anshof well to be spudded in September - 2Q23 production was 317 boe/d reaching 366 boe/d in June and including ~115 bbl/d at Anshof. Anshof-3 production performance continues to exceed expectations with strong pressure support and deliverability with no water production. Work-over activities at Zistersdorf and Gaiselberg (Vienna basin) in mid-August are expected to reinstate further production. In addition, a refurbished storage vessel at Anshof is expected to be commissioned in 3Q23, which will reduce production interruption and increase the production capacity of Anshof-3 from 115 bb/d to 150 bbl/d. We conservatively forecast ~350 boe/d production in 3Q23, which includes some unexpected downtime. Drilling at Anshof- continues to be expected to start in September. With discussions with potential farm-out partners progressing, ADX offers a combination of strong underlying value, increasing cashflow and reserves growth with very material exploration upside.
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Calima Energy (CE1 AU)C; target price of A$0.50 per share: Increasing dividend distribution to ~10% yield - 2Q23 production was 4,152 boe/d, above the estimates provided previously (4,125 boe/d). The J2J waterflood programme has added 130 bbl/d production, which we view as very encouraging since rolling out the waterflood programme to the rest of the asset could have a positive impact on recovery factors and reserves. The Pisces #8 and #9 wells continue to outperform with production 15% above the type curve. As of the end of July, Pisces #8 and Pisces #9 were producing ~400 boe/d and ~200 boe/d respectively. This implies minimal declines compared to the peak rates achieved in April. Calima will distribute a dividend of A$3 mm in September (in line with previous indications). The company will also distribute a further A$2 mm in January. While the second distribution is in line with our forecast, we view this confirmation as a positive. The headline 2Q23 capex of A$7.6 mm was higher than expected (A$3 mm) but reflects a negative working capital movement that we had mostly already incorporated into our operating cashflow forecast (~A$3 mm). No drilling or completion projects occurred in the quarter.
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Chariot (CHAR LN)C; target price of £0.50 per share: New Moroccan upstream licence award - Following the announcement of 10 July, Chariot has now been awarded the Loukos onshore gas licence with 75% WI (ONHYM: 25%). The licence covers an area of approximately 1,371 km2 and is adjacent to Chariot’s Lixus and Rissana offshore licences. The previous operator relinquished the Loukos licence before Anchois was recognized as a discovery and the related play was at the time poorly understood. Some onshore wells located between Anchois and initial highgraded area on Loukos were tested at 1.5-2.0 mmcf/d. A 150 km2 area is covered by modern 3D seismic and Chariot has already identified multiple shallow prospects that have been grouped by geological areas: Gaufrette with 26 bcf, Éclair with 30 bcf and Dartois with 13 bcf. One of the prospects had been clipped by a well drilled previously (and targeting a deeper horizon) but never appraised. The onshore wells are drill ready and a suitable drilling rig has already been identified in Morocco. Each well costs ~US$3 mm to drill. The individual onshore prospects share characteristics with their much larger analogs offshore. This means that any discovery onshore would have favourable implications on the risk profiles of some of the offshore prospects. The gas play is expected to extend beyond the 3D seismic and the overall prize onshore is probably larger than what has been mapped so far. With seven wells expected to be drilled in Morocco (three development wells at Anchois and four exploration wells onshore) over the coming 18 months, and a farm-out partner at Anchois due to be announced shortly, the story now benefits from much more frequent and material newsflow.
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Panoro Energy (PEN NO)C: target price of NOK50 per share: Growing production in Gabon. Gearing towards material exploration in 2024 – 2Q23 production was 8,093 boe/d, below our forecasts of 9,055 boe/d, mostly due to lower production in EG. This low production, combined with the delay to the restart of the gas lift compressor in Gabon (now online but not fully operational yet), has led Panoro to narrow its FY23 production guidance from 9.5-11.5 mboe/d to 9.5-10.5 mboe/d. 2Q23 WI production in Gabon was 2,660 bbl/d (in line) but with the addition of the third new well at Hibiscus Ruche Phase I development, WI production has recently reached up to ~5.2 mbbl/d (~30 mbbl/d gross). We forecast 28 mbbl/d gross production in 3Q23 (4.9 mbbl/d net to Panoro 17.5% WI). Overall corporate WI production has already reached levels of up to 11 mboe/d. With a total of 6 new Hibiscus Ruche wells (including 3 wells already on production), Panoro is on track to reach gross production plateau of ~40 mbbl/d (7 mbbl/d net to Panoro WI) in Gabon and overall WI corporate production of 13 mbbl/d at the end of the campaign. With the Hibiscus Ruche Phase I development progressing towards completion, Panoro’s 2024 programme will include more exploration. There are 2 additional drilling slots with the contracted rig in Gabon that could be used to drill 1-2 exploration wells at Dussafu. The overall exploration inventory on the licence is estimated at ~40 mmboe prospective resources net to Panoro. Akeng Deep is also expected to be drilled in EG in 2024 (180 mmbbl gross prospective resources.
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IN OTHER NEWS
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AMERICAS
88 Energy (88E AU/LN): Operating update in Alaska – 4Q23 production was 370 boe/d. Net cash at the end of June was A$7.3 mm. Project Peregrine is now expected to hold 2.4 bn bbl prospective resources (representing a reduction of ~1.4 bn bbl compared to previous estimates) across multiple prospects with individual chance of success of 7-18%.
Canacol Energy (CNE CN): Operating update in Colombia – Gas sales in July were 197 mmcf/d.
Gran Tierra Energy (GTE CN/US/LN): 2Q23 results and reserves increase in Colombia – 2P reserves at the end of June were estimated at 150 mmboe (+26 mmboe vs YE22). The reserves additions were largely driven by success with development drilling and waterflooding results in the Chaza Block and the Suroriente Continuation Agreement. 2Q23 production was 33,719 bbl/d. Net debt at the end of June was US$503 mm.
Parex Resources (PXT CN): 2Q23 results, reducing production guidance – 2Q23 production in Colombia was 54,120 boe/d. Net cash at the end of June was US$133 mm. The company is bringing a second rig at Arauca. The FY23 production guidance range has been reduced from 57,000-63,000 boe/d to 54,000-57,000 boe/d. Parex expects 4Q23 production to exceed 60,000 boe/d.
ASIA PACIFIC
Jadestone Energy (JSE LN): Shutting down production at Australian asset – A gas alarm indicated a possible communication with one of the adjacent tanks within the FPSO at Montara. Production from the Montara fields has been temporarily shut in and the National Offshore Petroleum Safety and Environmental Management Authority was notified of the incident. Tank 4S will be emptied and cleaned over the next week to permit an inspection to identify the source of the communication between tanks and allow for appropriate repairs. At 30 June, Jadestone held US$118 mm in cash and ~US$111 mm of debt. In addition, the US$35 mm Standby Working Capital facility remains undrawn.
EUROPE
bp (BP LN): 2Q23 results – Adjusted income for the period was US$2.6 bn with production of 2.3 mmboe/d, The FY23 capex guidance is unchanged at US$16-18 bn. bp is increasing its quarterly dividend by 10% to US$0.0727 per share. bp intends to execute a further US$1.5 bn share buyback prior to reporting tits 3Q23 results.
IOG (IOG LN): Operating update in the UK – The Blythe H2 gas rate has seen natural decline to ~26 mmcf/d currently (12/07: 32 mmcf/d), with over 95% operating efficiency in July and no associated water production.
Trillion Energy (TCF CN): Farm-in agreement in Turkey – Trillion is acquiring 50% working interest in three oil exploration blocks comprised of 151,484 hectares (374,325 acres) within the Cudi-Gabar petroleum province, Southeastern Turkiye from Derkim Poliüretan Sanayi ve Ticaret for a 100% carry estimated at US$16 mm for the acquisition of 351 km of 2D seismic in 2023 and the drilling of 4 wells in 2024.
FORMER SOVIET UNION
Caspian Sunrise (ENW LN): Operating update in Kazakhstan – Current production is ~1,700 bbl/d. The company has not received the payments due under the agreement to sell 50% of the Caspian Explorer for US$22.5 mm. Accordingly, Caspian is in discussions with alternative purchasers for the vessel.
TotalEnergies (TTE FP): Selling assets in Azerbaijan – TotalEnergies is selling 15% of Ashberon to ADNOC.
MIDDLE-EAST AND NORTH AFRICA
Genel Energy (GENL LN): 1H23 results – 1H23 production in Kurdistan was 13,440 bbl/d as the export pipeline from Kurdistan to Turkey remains shut down. Net debt at the end of June was US$158 mm. The FY23 capex guidance is now US$70 mm (US$100-125 mm previously) and the dividend is suspended.
Eni (ENI IM): Lifting force majeure on assets in Libya – The force majeure status on exploration areas A and B (onshore), and C (offshore) has been revoked.
Maha Energy (MAHA-A SS): Update in Oman – All 8 production wells drilled in the 2022/2023 drilling program were tested for a short term and 5 produced oil to surface at an initial estimated average rate of 300 bbl/d per well, while 3 had to be suspended after producing water and gas but before producing any oil.
Predator Oil & Gas (PRD LN): Raising new equity for Morocco – Predator has raised £10 mm of new equity at a price of £0.11 per share to fund the cost of the MOU-4 well and rigless well testing of MOU-1, MOU-3 and MOU-4.
EVENTS TO WATCH NEXT WEEK
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07/08/2023: Kosmos Energy (KOS US) – 2Q23 results
08/08/2023: Tethys Oil (TETY SS) – 2Q23 results
08/08/2023: PatroTal (PTAL LN/TAL CN) – 2Q23 results
09/08/2023: VAALCO Energy (EGYLN/US) – 2Q23 results
09/08/2023: GeoPark (GPRK US) – 2Q23 results
09/08/2023: Valeura Energy (VLE CN) – 2Q23 results
10/08/2023 : Frontera Energy (FEC CN) – 2Q23 results
10/08/2023: Canacol Energy (CNE CN) – 2Q23 results
10/08/2023: Neptune Energy – 2Q23 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.
BP is an integrated oil and gas group based in the United Kingdom. Co. is engaged in the exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; and the manufacture and marketing of petrochemicals. Co. operates globally, with business activities in Europe, the U.S., Canada, Russia, South America, Australasia, Asia and parts of Africa. Co. operates in two business segments: Exploration and Production - including oil and natural gas exploration and development and production; and Refining and Marketing- activities include the refining, manufacturing, supply and trading, marketing and transportation of crude oil, petroleum and petrochemicals.
Calima Energy and its subsidiaries are engaged in investing in oil and gas exploration and production projects internationally and more specifically in West Africa.
Canacol Energy is engaged in core petroleum and natural gas exploration and development activities in Colombia, Brazil and Guyana.
Caspian Sunrise is engaged in exploration and production of crude oil. Co. builds a portfolio of oil and gas exploration and production assets in Central Asia and in particular Kazakhstan.
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.
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.
Independent Oil and Gas, through its subsidiaries, is engaged in the business of oil and gas exploration and/or operations in the North Sea. Co. has its oil and gas interests are in the U.K. sector of the North Sea.
Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.
Maha Energy AB is a Sweden-based independent, international upstream oil and gas company whose business activities include exploration, development and production of crude oil. It directly operates through Maha Energy Inc in Canada, as well as Maha Energy 1 [Brazil] AB and Maha Energy 2 [Brazil] AB in Sweden. It owns an oil field in Wyoming, the United States. The Company specializes in primary, secondary and enhanced oil and gas recovery technologies, and operates a technical office in Calgary and Alberta in Canada, as well as an operations office in Newcastle and Wyoming in the United States. The Company operates as wholly-owned subsidiaries Gran Tierra Finance (Luxembourg) SARL and Gran Tierra Brazco (Luxembourg) SARL.
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.
Parex Resources is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. As of Dec 31 2010, Co. had gross proved light and medium oil reserve of 1,066 thousand barrels (net: 980 thousand barrels).
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.
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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