Auctus on Friday - 28/04/2023

AUCTUS PUBLICATIONS
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ADX Energy (ADX AU)C: Target price of A$0.100 per share: 1Q23 update – 1Q23 production in Austria was 299 boe/d. The company held A$3.41 mm in cash at the end of March.

Criterium Energy (CEQ CN)C: On track for near term acquisition – The FY22 financials were in line with our expectations. The company held C$3.7 mm in cash at YE22. Criterium has also filed the notice of intention to file a short form prospectus. This could be an indication that the company is close to announcing an acquisition and/or an equity transaction. With many sellers looking to reduce their exposure to hydrocarbons, a management team with extensive experience in South East Asia and limited competition, Criterium is targeting the acquisition of 1-3 mboe/d by YE23 in Thailand, Indonesia, Malaysia or Vietnam. The stated ambition is to grow production to 8-10 mboe/d by 2026. While other potential acquirers are focused on larger assets, the market that Criterium is initially targeting is less crowded and it is likely to be possible to acquire assets at very attractive prices.
See website for full report

Hartshead Resources (HHR AU)C: Target price of A$0.18 per share: 1Q23 update – Hartshead held A$35 mm in cash following the recent equity raise. Operations are on track.

Panoro Energy (PEN NO)C: Target price of NOK50 per share: 92% reserves replacement ration - YE22 1P, 2P and 3P reserves were estimated at respectively ~23 mmbbl, 36 mmbbl and 49 mmbbl, broadly equal to the estimates at YE21. Panoro has replaced 92% of its production during 2022 (2.8 mmbbl). The main driver for the reserves addition was the licence extension in EG (+2.7 mmbbl). This is in line with our expectations. Reserves at the other assets reflect the YE21 estimates net of production during 2022. In addition, Panoro was estimated to hold 23.9 mmbbl of 2C contingent resources at YE22. This includes 13.1 mmbbl in EG that are associated with projects that have not yet been approved and potential production beyond the current licence expiry dates. Some of these contingent resources may be re-assigned as reserves if certain projects are approved or licence terms further extended. The shares continue to offer a combination of value, growth and dividend distribution.

PetroTal (PTAL LN/TAL CN)C: Target price of £1.50 per share: High production. More free cash flow than expected. ONP pipeline operational – 1Q23 production was 12,618 bbl/d, above our expectations of 11,500 bbl/d. Oil sales continued to be very high in March at 21,500 bbl/d with 19,565 bbl/d sold through Brazil and the balance to Iquitos, with production averaging > 20 mbbl/d for more than 60 consecutive days. The Northern Peruvian Pipeline (ONP) has also resumed operations and PetroTal estimates that ~270,000 bbl of oil will be exported in late 2Q23 at Bayovar, generating US$5-7 mm in net revenue. For the time being, PetroTal is not planning to export new volumes through the ONP until there is a guarantee of payment and Petroperu’s credit lines function normally. Well 14H has been put in production at a rate of 3 mbbl/d constrained by export route capacity. The well is producing at a similar initial rate to Well 12H. This is in line with expectations. This is a very strong operational update and PetroTal has re-iterated its FY23 production guidance of 14-15 mbbl/d with an upside case of 17 mbbl/d for 2H23 depending on river levels. The story continues to be about significant free cash flow generation, production and reserves growth with generous shareholders returns through a share buyback programme for up to 10% of the share capital over a period of 12 months from 2Q23 and a US$0.015 per share quarterly dividend, representing a ~13% annual dividend yield.
See website for full report

SDX Energy (SDX LN): FY22 results – FY22 net entitlement production was 3,723 boe/d. The company held US$4.9 mm net cash at YE22. At YE22, WI 2P reserves were estimated at 4.9 mmboe.

IN OTHER NEWS
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AMERICAS

Challenger Energy (CEG LN): Mapping large prospects offshore Uruguay – An initial prospect inventory of 1 to 2 bnbbl across three prospects has been defined from Challenger’s 2D seismic reprocessing work. The prospects are located in 85-750 m of water with reservoir depth of 3,800-5,000 m.

Hess (HES US): Mixed drilled results in Guyana – The Lancetfish-1 well encountered ~92 feet of oil bearing sands while the Kokwari-1 well was dry.

Harbour Energy (HBR LN): Discovery in Mexico – The Kan-1 exploration well has made a 200-300 mmbbl oil discovery in Block 30, offshore very shallow water Mexico.

TotalEnergies (TTE FP): Selling Canada assets – Total is selling its Canadian assets to Suncor Energy for US$4.1 bn.

Touchstone Exploration (PXT CN): Well update in Trinidad – The first of five formations at Roystone did not flow oil to surface. This section of the formation appears to be a low permeability reservoir. The company will now test the remaining formations.

Trinity E&P (TRIN LN): 1Q23 update in Trinidad – 1Q23 production was 2,899 bbl/d. The company held US$11.4 mm in cash as at the end of March with US$2.3 mm drawn on its debt facilities.

ASIA AND AUSTRALASIA

Jadestone Energy (JSE LN): FY22 results – FY22 production was 11,487 boe/d. 1Q23 production averaged just over 10,000 boe/d. Production over 2Q-4Q23 is expected to average 13,500-15,500 boe/d with US$110-140 mm capex. YE22 2P reserves were estimated at ~65 mmboe with ~104 mmboe 2C resources. Net cash at YE22 was US$123 mm.

EUROPE

Aker BP (AKERNP NO): 1Q23 results – 1Q23 production in Norway of 452.7 mboe/d had already been reported. Net debt at the end of March was US$2.4 bn. A dividend of US$0.55 per share has been declared. The FY23 production guidance of 430-460 mboe/d with US$3.0-3.5 bn capex and US$0.1-0.2 bn of abandonment spend has been re-iterated.

Eni (ENI IM): Q23 results – Adjusted net profit for the period was EUR 2.9 bn with 1,656 mboe/d production. The company has re-oiterated its FY23 production guidance of 1.63-1.67 mboe/d with capex of only EUR9.2 bn EUR9.5 bn previously).

Europa Oil & Gas (EOG LN): Six month results for the period ending 31/01/23 – Production in the UK was 253 boe/d. As at the end of January, the company held £5.5 mm in cash and cash equivalents.

Reabold Resources (RBD LN): Update in the UK – In the UK North Sea, Oulton is estimated to hold 11 mmbbl of 2C resources. Net mean aggregate unrisked prospective oil resources are estimated at 148.5 mmbbl while net gas prospective resources could total 36.5 mmboe. Reabold is initiating a £0.75 mm share buyback.

OMV (OMV AG): 1Q23 results – Adjusted net income for the period was EUR1.0 bn with 376 boe/d production. Fy23 production is expected to be ~360 mboe/d with EUR1.6 bn capex.

OKEA (OKEA NO): Trading update in Norway –1Q23 production was 22,210 boe/d. Net cash at the end of March was ~US$40 mm. The production and capex guidance for 2023 remain unchanged with production at 22,000 25,000 boe/d and capex guidance at NOK 1,700-2,100 mm.

Repsol (REP SM): 1Q23 results – Adjusted net income for the period was EUR1.9 bn with 608 mboe/d production.

TotalEnergies (TTE FP): 1Q23 results – Adjusted net income for the period was US$6.5 bn with 2,524 mboe/d production. Up to US$2 bn of shares will be bought back in 2Q23.

UK Oil & Gas (UKOG LN): Test update in Turkey – Swabbing the 107-metre open test zone at the Pinarova-1's secondary target initially returned only drilling fluids which then became cut with possible formation water during the latter stages of testing.

VAR Energi (VAR LN): 1Q23 results – The FY23 production guidance of 210-230 mboe/d has been re-iterated. US$270 mm will be distributed as dividend in May. The company further plans to distribute a dividend of US$270 mm for 2Q23.

FORMER SOVIET UNION

Nostrum Oil & Gas (NOG LN): 1Q23 update in Kazakhstan – 1Q23 production was 10,479 boe/d. The Group's unrestricted cash position at the end of March was >US$191 mm.

MIDDLE EAST AND NORTH AFRICA

Capricorn Energy (CNE LN): FY22 results and strategic update – Capricorn will return ~US$575 mm to shareholders. This includes a special dividend in 4Q23 of US$100 mm. The payment of this dividend is contingent on addressing the receivables position in Egypt; the outcome of conversations with stakeholders in Egypt around licence extensions and renegotiation of terms and oil and gas price for the remainder of 2023. FY22 production in Egypt was 34.2 mboe/d. The company forecasts production of 32-36 mboe/d in 2023 with US$155-175 mm capex. In Mexico, Cairn is exiting Block-7 where the Yatzil-1X well encountered 20 mmbbl of oil in place.

Gulf Keystone Petroleum (GKP LN): Cutting capex and withdrawing production guidance in Kurdistan – Up to the Iraq-Turkey pipeline shut-in on 25 March, gross production in 2023 was ~49,200 bbl/d and was ~53,700 bbl/d in March . The suspension has resulted so far in a gross production deferment to date of ~4,400 bbl/d on a full-year basis. Overdue receivables for the months of October 2022 to January 2023 total US$102 mm net. Cash balances were US$99 mm at 26 April. May to December 2023 net capital expenditures are now estimated at US$35-40 mm with FY23 net capital of expenditures of US$80-85 mm (prior guidance: US$160 $175 mm). The production guidance for 2023 is suspended and the board is reconsidering the previously declared final 2022 ordinary annual dividend of US$25 mm.

United Oil & Gas (UOG LN): FY22 results – FY22 production in Egypt was 1,312 boe/d. YE22 net debt was US$1.5 mm. 1Q23 oil production averaged 841 bbl/d net, with an exit rate for the quarter of 1,275 bbl/d net.

SUB-SAHARAN AFRICA

Seplat Energy (SEPL LN): 1Q23 results – 1Q23 WI production in Nigeria was 51,720 boe/d. Downtime was 20% with losses of only 3.5%. The FY23 production guidance of 45-55 mboe/d with US$160 mm capex has been re-iterated. First gas at ANOH is now expected in 4Q23. Net debt at the end of March was US$288 mm. The core annual dividend is raised by 20% to US$0.12 per share.

Tullow Oil (TLW LN): Swapping Assets in Gabon – Tullow is transferring its existing percentage participating interests in the Limande, Turnix, Moba and Oba assets and part of its existing percentage of the Simba assets to Perenco. In return, Perenco is transferring its existing percentage participating interests in each of the Kowe (Tchatamba) and DE8 assets to Tullow, resulting in post-completion holdings of 40% for Tullow. Tullow's 2023 Group production guidance of 58,000 to 64,000 bbl/dd remains unchanged.

EVENTS TO WATCH NEXT WEEK
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02/05/2023 - BP (BP LN): 1Q23 results
03/05/2023 – GeoPark (GPRK US): 1Q23 results
04/05/2023 – Shell (SHEL LN): 1Q23 results
04/05/2023 - OKEA (OKEA NO): 1Q23 results