AUCTUS ON FRIDAY - 01/03/2024
AUCTUS PUBLICATIONS________________________________________
ADX Energy (ADX AU)C; target price of £A$0.65 per share: High impact well spud in Austria - The Welchau-1 gas exploration well was spudded on 24 February.
Calima Energy (CE1 AU)C; target price of A$0.13 per share: Completing divestment of Blackspur – Blackspur has been sold for A$81.6 mm, after tax provisions and net debt adjustments. Calima will distribute A$80 mm (~A$12.6 per share) as dividends. The distribution is well above the minimum expected distribution (85% of A$80-81 mm = A$69 mm). Post distribution, Calima will hold A$5 mm in cash.
Panoro Energy (PEN NO)C; target price of NOK47 per share: BW Energy reports YE23 reserves in Gabon – Gross 2P reserves at Dussafu were estimated at 94.5 mmbbl (YE22: 96.2 mmbbl) with 45.8 mmbo 2C contingent resources. Netting off 6.3 mmbbl gross production during 2023, the YE23 reserves estimate implies a reserve addition of ~4.6 mmbbl, probably associated with the Hibiscus discovery. The contingent resources estimate has increased by ~7 mmbbl. Panoro holds 17.5% of Dussafu.
Pulsar Helium (PLSR CN)C; target price of C$0.80 per share: High Helium concentration at high impact appraisal well – •The Jetstream #1 appraisal well at the Topaz helium project in Minnesota encountered helium shows while drilling with helium concentration of up to 12.4% according to the on-site spectrometer. The helium shows were encountered at depth of 1,750 – 2,200 feet just above TD at 2,250 feet. The helium mudlog gas composition increased from 3.7% to 5.1% over the period. Due to the significant air volumes pumped into the well during the drilling process, these measurements are considered to be a minimum value due to dilution by atmospheric contamination.
VAALCO Energy (EGY US)C; target price of US$10.00 per share: New country entry with immediate production – VAALCO is acquiring Svenska Petroleum Exploration for a headline price of US$66.5 mm. This price includes a pre-closing dividend of cash on Svenska’s balance sheet to the seller and an estimated cash payment by VAALCO of ~US$30-40 mm on closing in 2Q24. The primary asset of Svenska is a 27.39% interest in Block CI-40, offshore Cote d'Ivoire with 1P and 2P reserves of respectively 13 mmboe (99% oil) and 21.7 mmboe (97% oil) (as at the end of 3Q23) and current WI production of 4,500 boe/d at the Baobab offshore field (900-1,300 m water depth). The operator is Canadian Natural Resources (CNR) that holds 57.61% interests in the licence. The Baobab FPSO is scheduled to be taken offline in early 2025 for planned maintenance and upgrades to return to production in 2026. Significant development drilling is expected to begin in 2026 with meaningful additions to production from Baobab. According to the Svenska 2019 annual report, the latest development phase (phase 4) grew gross production to 30 mbbl/d to recover 50 mmbbl. The transaction provides further risk diversification by adding a location with a relatively low risk profile. The transaction also appears very attractive given the low price paid by VAALCO. As we incorporate our estimates of the value of Baobab’s 2P reserves, we have increased our target price from US$9/sh to US$10/sh in line with our new ReNAV. Pending further details, we are not ascribing any value to Svenska’s appraisal assets yet.
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IN OTHER NEWS
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AMERICAS
Alvopetro Energy (ALV CN): Reserves update in Brazil – YE23 WI 2P reserves were estimated at 8.7 mmboe (YE22: 9 mmboe) with 5.9 mmboe 2C contingent resources and 11.9 mmboe unrisked prospective resources (best estimate).
Helium Evolution (HEVI LN): Operating update in Canada – The 2-31 Well was production tested at approximately 4 mmcf/d from the deadwood formation on a three-day extended test, with a helium concentration of 0.95%. The 9-35 Well was producing approximately 7 mmcf/d at the end of a six-day extended flow period, with a helium concentration of 0.64% and no water.
i3 Energy (GTE LN/CN.US): Operating update in Canada – FY23 production was 20.7 mboe/d with 20.4 mboe/d in 4Q23. YE23 net debt was US$23 mm.
Maha Energy (MAHA-A SS): FY23 results – 4Q23 production in Brazil and USA was 2,217 boe/d. YE23 2P reserves in USA were estimated at 2.8 mmboe. The company held US$97 mm in net cash at YE23.
Molecular Energies (MEN LN): Drilling suspended in Paraguay – The Tapir -1 exploration well has been suspended due to tough drilling conditions without reaching the target zone.
Parex Resources (PXT CN): FY23 results – FY23 production in Colombia was 54,356 boe/d. YE23 net cash was US$50 mm. Parex’s FY 2024 average production guidance of 54,000 to 60,000 boe/d and capital expenditures of US$390 to US$430 mm remain unchanged. Parex has resumed activity in the Northern Llanos following social protests. Parex held 2P reserves of 168 mmboe at YE23 (YE22: 201 mmboe). While the company produced 19.9 mmboe during 2023, there was also a net reserves reduction of ~12.3 mmboe.
Seacrest Petroleo (SEAPT NO): FY23 results – 4Q23 production in Brazil was 8,221 boe/d. YE23 adjusted net debt was US$282 mm. The company expects to produce 9.5-12.5 mboe/d in 2024 with an YE24 exit rate of 12-17 mboe/d and US$70-100 mm capex.
Touchstone Exploration (TXP LN/CN): Reserves update in Trinidad – YE23 2P reserves were estimated at 67.4 mmboe. This represents a 10% reduction vs YE22 that reflects he removal of eight PUD locations on the legacy crude oil blocks and Royston, technical revisions to the natural gas liquids yields at Cascadura, increased annual production volumes in 2023 and a limited 2023 development capital program.
ASIA AND AUSTRALASIA
Falcon Oil & Gas (FOG LN/FO CN): Well test result in Australia – The SS-1H shale well in EP 117 achieved an average 30-day initial production (IP30) flow rate of 3.2 mmcf/d over the 1,644-foot, 10 stage stimulated length within the Amungee Member B-Shale, normalised to 6.4 mmcf/d over 3,281-feet. This is above the company’s expectations. The IP30 flow test extrapolates to ~19.5 mmcf/d for proposed future 10,000-foot development wells. The partners will now progress development plans for the proposed 40 mmcf/d pilot project at the Shenandoah South location. At the end of January, Falcon held ~US$5 mm in cash.
Woodside Energy (WDS AU/LN): FY23 results – FY23 production was 513 mboe/d. Dividend for FY23 will be US$1.40 per share (US$2.53 per share in 2022). The company expects to produce 505-533 mboe/d in 2024 with US$5-5.5 bn capex.
EUROPE
Beacon Energy (BCE LN): Rasing new equity for Germany – Beacon has raised £2.6 mm of new equity priced at 0.05 p per share. The proceeds of the raise will be used for drilling and completion of a side track and payments of outstanding costs related to the SCHB-2 (2.) well.
Cindrigo (CINH LN): Acquiring Waste to Energy plant in Finland – Cindrigo has signed a Memorandum of Understanding for the acquisition of a 50-year lease on a 110 MW Waste to Energy combined heat and power plant located in Kaipola. The facility consists of 25 MW of electricity and 85 MW of steam. The purchase price is EUR18.95 mm including EUR0.1 mm in cash plus EUR15 mm in Cindrigo shares on closing.
Hydrogen Utopia (HUI LN): RTO – Hydrogen Utopia has signed heads of terms for the acquisition of the entire issued share capital of Helmond Holding Group. Helmond is involved in the production and business of biofuels and its bi-products, with revenues in excess of EUR365 m and profits before taxes in excess of EUR40 mm (FY22). Helmond owns land in Europe with substantially all permits and authorisations required for the rollout of a waste plastic to hydrogen facility. The company also owns a number of operational plants in different jurisdictions. The price for Helmond will be ~£500 mm that will be satisfied in part by the issue of new shares at a price of £0.09 per share. In addition, the parties will agree a structure whereby existing Hydrogen Utopia shareholders will each receive at completion 3 p cash for every share that they hold.
MCF Energy (MCF CN): Acquisition in the Czech Republic – MCF is acquiring the NT Ridge (2,800 acres or 11.3 sq km), Krasna NP-823 (497 acres or 11.3 sq km), and LM (3,583 acres or 14.5 sq km) licences. There are two proved and productive targets, the Miocene sands and Devonian carbonates. Significant untested potential exists in the oil-productive fractured basement. 15 proved undeveloped locations have an estimated 11.9 bcf of 2P reserves. The proceeds of the transaction include issuing 17.5 mm of MCF Energy shares to the seller and a cash payment of ~US$1.3 mm.
Reabold Resources (RBD LN)/Union Jack Oil (UJO LN): Operation update in the UK – A well twinning the WN-A1 discovery well at West Newton is expected to be drilled in 2024. WN-A1 had not been tested. The new well will target the Kirkham Abbey and the potential deeper Rotliegend formations. Funding for the well could be sourced from a farm-in partner or increased contribution from Reabold.
Wintershall Dea/ Aker BP (AKER BP NO): Resource increase in Norway – Following appraisal drilling, the Adrian discovery is now estimated to hold 28-43 mmboe (19-31 mmboe previously).
MIDDLE EAST AND NORTH AFRICA
Gulf Keystone Petroleum (GKP LN): Production update in Kurdistan – Gross production in February has averaged 38.4 mbbl/d leading to average production to date in 2024 to be 29.6 mbbl/d. The company expects to increase sales above the current level.
United Oil & Gas (UOG LN): Raising new equity – United has raised £1 mm of new equity priced at £0.002 per share.
SUB-SAHARAN AFRICA
Africa Oil (AOI SS/CN): FY23 results and reserves update – YE23 WI 2P reserves in Nigeria were estimated at 52.2 mmboe (YE22: 55.6 mmboe). FY23 WI production in Nigeria was 19.8 mboe/d. The readthrough net debt of Africa Oil’s 50% WI in Prime is US$299 mm. Africa Oil’s holds US$232 mm in cash. FY24 WI production is expected to be 16.5-19.5 mboe/d with US$100-130 mm net capex in Nigeria.
Aminex (AEX LN): Increasing resources estimate in Tanzania – Following the interpretation of the 3D seismic at Ruvuma, the in-place volumetrics for the Ntorya gas discovery have increased from 1.64 tcf to 3.45 tcf. An upside aggregated GIIP volume for the Ntorya accumulation based on a success case in multiple stacked sands at Chikumbi-1, is to be up to 7.95 tcf. The 3D dataset has also revealed further undrilled structural and stratigraphic plays spanning a range of geological intervals which are estimated to contain a total Pmean unrisked GIIP potential of 8.43 tcf (excluding Ntorya).
BW Energy (BWE NO): FY23 results – 4Q23 gross production in Brazil and Gabon was 33 mbbl/d. YE23 net debt was US$179 mm. YE23 2P reserves were estimated at 209.8 mmboe (YE22: 170.8 mmboe) with 370.6 mmboe 2C contingent resources. The company expects to produce 10-12 mmbbl in 2024 with US$250-300 mm net capex.
Far (FAR AU): No capital gain in Senegal – Senegal has confirmed that there was no capital gain tax on the sale of Far’s interests in the Sangomar project to Woodside.
Kosmos Energy (KOS LN/US): 4Q23 results – 4Q23 production was 66 mboe/d. This includes 43.3 mboe/d in Ghana, 13.9 mboe/d in the US and 8.7 mbbl/d in EG. YE23 1P and 2P reserves were respectively estimated at 280 mmboe (104% replacement rate ratio) and 520 mmboe. YE23 net debt was US$2.3 bn. TEN has now been fully impaired and does not carry any book value. First LNG in Mauritania and Senegal is expected in 4Q24. Kosmos expects to produce 71-77 mboe/d n 2024 with US$700750 mm capex.
Seplat Energy (SEPL LN): FY23 results. Special dividend – FY23 production in Nigeria was 47,758 boe/d. YE23 net debt was US$306 mm. The company held 478 mmboe 2P reserves at YE23 (+9% vs YE22). A special dividend of US$0.03 per share has been declared taking the total declared dividend for FY23 to US$0.15 per share. Seplat expects to produce 44-52 mboe/d in 2024 with UE170-200 mm capex. The Sibiri oil discovery is estimated to hold 91 mmbbl in place. First gas at ANOH is expected in 3Q24.
EVENTS TO WATCH NEXT WEEK
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06/03/2024: GeoPark (GPRK US) – FY23 results
07/03/2024: Frontera Energy (FEC CN) – FY23 results
Africa Oil is an international oil and gas exploration company based in Canada with oil interests in Kenya, Ethiopia, Puntland (Somalia) and Mali. Co. is an exploration stage enterprise that participates in oil and gas projects located in sub-Saharan Africa.
Aker BP ASA engages in the exploration, development, and production of petroleum resources on the Norwegian Shelf. In addition, Co. has a separate Johan Sverdrup business unit to manage its interest.
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.
Aminex is an oil and gas production and development group based in Ireland. Co. is engaged in the exploration for, and the development and production of oil and gas reserves. Co. maintains its operations through subsidiary companies. Co.'s principal areas of activity are the United States of America, East Africa, North Africa and North Korea.
BW Energy Ltd. BW Energy Limited is a Bermuda-based oil and gas company engaged in oil and gas exploration and production activities. The Company is involved in the acquisition, development and production of oil and natural gas fields. It has a diversified portfolio of production and development assets offshore West Africa and Brazil, and holds interests in three hydrocarbon licenses in Gabon, Brazil and Namibia. Its Dussafu Marin Permit and the associated Ruche Exclusive Exploitation Area (EEA) production license are located approximately 50 kilometers (km) off the coast of Gabon. The Ruche EEA covers an area of approximately 850 square kilometers. The Maromba discovery is located approximately 100 kilometers offshore in the southern part of the Campos Basin. The Kudu gas field is some 130 km offshore and covers an area approximately 4,500 square kilometers. The Company's subsidiaries include BW Energy Dussafu B.V., BW Energy Gabon Pte Ltd, BW Energy Gabon SA and BW Energy Holdings Pte Ltd.
Calima Energy and its subsidiaries are engaged in investing in oil and gas exploration and production projects internationally and more specifically in West Africa.
i3 Energy is engaged in the development and production of oil and gas in the UK North Sea. Co.'s strategy is to focus on the development of discoveries located close to existing infrastructure and the exploitation of producing fields, whilst maintaining limited exploration exposure.
Kosmos Energy is a holding company. Through its subsidiaries, the company operates as a deepwater independent oil and gas exploration and production company focused along the Atlantic Margins. The company's assets include production offshore Ghana, Equatorial Guinea and U.S. Gulf of Mexico, as well as gas development offshore Mauritania and Senegal. The company also maintains a sustainable exploration program balanced between proven basin infrastructure-led exploration (Equatorial Guinea and U.S. Gulf of Mexico), emerging basins (Mauritania, Senegal and Suriname) and frontier basins (Cote d'Ivoire, Namibia and Sao Tome and Principe).
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).
Reabold Resources is engaged in investing company in the natural resources sector.
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.
United Oil & Gas is engaged to take control or investing in businesses within the oil and gas sector.
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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