AUCTUS ON FRIDAY - 12/04/2024
AUCTUS PUBLICATIONS________________________________________
ADX Energy (ADX AU)C; target price of A$1.00 per share: Restarting production at Anshof – The Permanent Production Facility (PPF), with a capacity of 3,000 bbl/d of liquids, has been commissioned and the Anshof-3 well has recommenced production at a rate of 134 bbl/d with no water. The operation has been undertaken in line with expectations and within budget. The oil production rate at Anshof-3 is 16% above the rate prior to shut-in. ADX anticipates increasing production from the well to 150 bbl/d. No permanent staff will be required on the site, which should reduce opex. The company expects to drill the Anshof-2 side track shortly. The well is expected to come onstream in 3Q24. A third Anshof producer (Anshof-1) could take gross production at the field to ~900 bbl/d by YE24. An updated reserves and resources estimate for Anshof is expected to be announced after this well has been drilled. ADX plans to also drill the LICH or IRR prospect with MND (we currently conservatively assume that the smallest of the two prospects will be drilled first). The company will also test the high impact Welchau discovery in 4Q24.
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Chariot (CHAR LN)C; target price of £0.50 per share: Gearing-up to drilling offshore and onshore – The farm-out transaction with Energean has now completed. Chariot has received the US$10 mm cash upfront payment and retains 30% of in the Lixus licence (where the Anchois project is located) and 37.5% of the Rissana licence, offshore Morocco. A rig contract has also been signed with Stena Drilling to drill the high impact Anchois-East appraisal and development well in 3Q24. Anchois East is a very important well that could increase the size of Anchois to >1 tcf (300 bcf net to Chariot). Our overall unrisked NAV for Anchois, including Anchois East Footwall and Anchois East North Flank, is £0.42/sh. This represents 4.5x the current share price. Energean has the option to acquire a further 10% of Anchois in return for a (1) a further US$50 mm convertible/share payment, (2) a US$850 mm gross carry and (3) a 7% royalty. The cash and carry component values 10% of the project at US$220 mm or US$440 mm for Chariot’s residual 20% interest (£0.31/sh). The royalty adds further value. Exploration drilling onshore is also expected to start on the Loukos licence very shortly.
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GeoPark (GPRK US)C; target price of US$26 per share: Potential acquisition of unconventional producing assets in Argentina - GeoPark has submitted a binding offer to acquire a non-operated Working Interest in unconventional blocks in the Neuquen Basin in Argentina. The offer has been accepted by the seller and the parties are working on an exclusive basis towards execution of definitive agreements. The completion of the transaction could occur in 3Q24. The acquisition would add net production of 5 mboe/d. The acquisition price is ~US$200 mm plus an additional carry of US$110-120 mm (gross), over a two year period, for exploration activities. Since the new administration in Argentina came to power a few months ago, the country has attracted more interest from the industry with multiple new laws looking to loosen regulations. YPF has also started a formal sale process for 55 mature producing conventional fields with 100 mboe/d aggregate production that it expects to be complete by YE24. Along the same lines of what happened in Brazil, this could revitalize interest in Argentina with the entry of multiple new players.
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New Zealand Energy (NZ CN)C: Equity raise for new New Zealand – New Zealand is increasing the size of the previously announced private placement from C$4.5 mm to C$5.0 mm. The proceeds of the raise will be invested in development activities in New zealand.
PetroTal (PTAL LN/TAL CN)C; target price of £1.45 per share: Gearing-up to drilling offshore and onshore –1Q24 production of 18,518 bbl/d was in line with our expectations. Production over the last 30 days was 20.5 mbbl/d with the recently drilled 17H well, now on pump, delivering 4,500 bbl/d. This bodes very well for 2Q24 production given that the 18H well is expected to commence production in May. We currently forecast only 19 mbbl/d production in 2Q24, which could be on the low side. PetroTal held US$63 mm in unrestricted cash plus US$22 mm of restricted March as the end of March. While the amount of unrestricted cash was below our expectations of ~US$89 mm, the difference was due to a negative working capital movement with a significant increase in receivables from US$68 mm at YE23 to ~US$111.7 mm at the end of March 2024, while current payables were only down ~US$6 mm. With revenue payments received in early April, we anticipate a reversal of this working capital build-up in coming periods assuming everything else being equal. Overall Petrotal held working capital (being unrestricted and restricted cash plus receivables minus payables) of ~US$122 mm at the end of March (we anticipated only ~US$92 mm). This represents an increase of >US$27 mm compared to YE23.
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Valeura Energy (VLE CN)C; target price of C$9.00 per share: Net cash up by >US$40 mm since YE23 - 1Q24 production was 21.9 mbbl/d in line with our expectations. Production at the end of March was ~23 mbbl/d. Net cash of US$193.6 mm (US$176.3 mm unrestricted) was high given that the company sold only 1.8 mmbbl in 1Q24 with inventory building-up ~0.21 mmbbl vs YE23 to 0.9 mmbbl. The inventory increase represents >US$16 mm of deferred operating cashflow at US$85/bbl for Brent. The US$193.6 mm net cash position as at the end of March represents an increase of US$42.4 mm compared to YE23. Price realizations in 1Q24 were US$1.5/bbl above Brent. The FY24 production guidance of 21.5-24.5 mbbl/d with US$205-235 mm opex and US$135-155 mm capex has been re-iterated. The company could publish a drilling update next week.
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IN OTHER NEWS
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AMERICAS
Active Energy (AEG LN): Looking to sell key asset due to lack of funding – Active Energy has decided to look for a buyer for its biomass fuel business. This is due to the company being unable to raise sufficient funding to build the planned production facility.
Helix Exploration (HEX LLN): New helium company trading on AIM – The shares of Helix have started trading on AIM. The company has raised £7.5 mm of new equity that will be deployed for exploration drilling in the USA.
Maha Energy (MAHA-A SS): Reserves, resources and production update in Brazil/MOU to support a possible merger between 3R Petroleum and Enauta – YE23 net 2P reserves for 3R Offshore are estimated at 23 mmboe with 22 mmboe net 2C resources. Maha net production in March was 2,050 boe/d. In the context of the possible merger between Enauta and 3R Petroleum, Maha has signed a MOU with Enauta whereby Maha would exchange its 15% holdings in 3R Offshore against 2.17% of the combined entity. Maha also holds 5% of 3R Petroleum.
Pantheon Resources (PANR LN): Resources update in Alaska – Kodiak is now expected to hold 1.2 bnbbl of liquid plus 5.4 tcf of natural gas contingent resources (best case). This represents a 25% increase since the previous report.
Parex Resources (PXT CN): Consolidation of assets with Ecopetrol in Colombia – The LLA-4-1, LLA-16-1, and LLA-121 blocks have been harmonized so that Parex and Ecopetrol have become 50-50 joint venture partners. Parex
has received a 50% participation share in the form of exploratory rights within the Sirirí Convenio, where the producing Gibraltar field is located, in exchange for drilling the Gibraltar Profundo exploration well and further capital investments of US$11 mm (gross). The Gibraltar field will remain 100% Ecopetrol WI.
Touchstone Exploration (TXP LN/CN): Operational update in Trinidad – Net sales in 1Q24 were 7,015 boe/d. This includes 5,389 boe/d for Cascadura. The Cascadura flowline and infrastructure upgrades remain on track for completion in 3Q24.
ASIA AND AUSTRALASIA
Chevron (CVX US): Exiting Myanmar – Chevron has divested its interests in the Yadana field to partners PTTEP and MOGE. Chevron did not receive any considerations.
Jadestone Energy (JSE LN): Woodside Energy cancels sale of Australia assets – Woodside has cancelled the sale of its participating interests in the Macedon and Greater Pyrenees Projects, offshore Western Australia, that Jadestone was considering acquiring.
Total Energies (TTE FP): More work required to declare commerciality at PNG project – The first EPC offers received by Total for the Papua LNG project are too high to allow Total to reach FID the project. In view of that, the company will review the structure of some packages and open the competition to an enlarged panel of Asian contractors. As a consequence, FID of Papua LNG project is now expected in 2025.
EUROPE
Aker BP (AKERBP NO): 1Q24 operating update – 1Q24 production was 448 mboe/d.
Cindrigo (CINH LN): acquisition of waste to Energy business in Finland – Cindrigo is acquiring Kaipolan Energia that holds a 50-year lease of a 110 MW Waste to Energy combined heat and power plant located in Kaipola, for a consideration of EUR18.95 mm. This includes EUR15 mm in Condrigo shares, priced at EUR1.10 per share.
OMV (OMV AG): 1Q24 update – 1Q24 production was 352 mboe/d.
Repsol (REP SM): 1Q24 update – 1Q24 production was 590 mboe/d.
Var Energi (VAR NO): 1Q24 operational update in Norway – 1Q24 production was 299 mboe/d.
FORMER SOVIET UNION
Caspian Sunrise (CASP LN): Acquisition in Kazakhstan – Caspian is acquiring CS Energy which holds the West Shalva contract area for a maximum consideration of US$15 mm. US$5 mm will be paid on completion by the issue of 99,206,349 shares in Caspian and US$5 mm will be paid following the first oil at West Shalva by the issue of a further 99,206,349 shares. CS will also receive the first US$5 mm revenue from West Shalva in cash. West Shalva is adjacent to the more established Shalva, which has C1 reserves of approximately 5 mmbbl and is believed to be producing at approximately 400 bbl/d.
MIDDLE EAST AND NORTH AFRICA
Eni (ENI IM): Dry hole in Morocco – The Cinnamon-1 exploration well was dry.
SUB-SAHARAN AFRICA
Noble Helium (NHE CN): Raising capital for Tanzania helium – Noble Helium is raising A$3.5 mm of new equity priced at A$0.09 per share. Participants will also receive one option to acquire a new share at a price of A$0.20 per share for every three shares subscribed. Funds raised will be primarily used towards developing additional targets at the North Rukwa Project in Tanzania and early exploration activities.
PetroNor (PNOR NO): 1Q24 update in Congo – 1Q24 production was 5,025 bbl/d.
EVENTS TO WATCH NEXT WEEK
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17/04/2024 - Star Energy (STAR LN): FY23 results
18/04/2024 – Nostrum Oil & Gas (NOG LN): FY23 results
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.
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.
Chevron is engaged in energy and chemicals operations. Upstream operations consist primarily of, among others, exploring for, developing and producing crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas, storage and marketing of natural gas; and a gas-to-liquids plant. Downstream operations consist primarily of, among others, refining crude oil into petroleum products; marketing of crude oil and refined products; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives.
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.
Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.
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).
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).
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
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.
Valeura Energy is engaged in the exploration, development and production of petroleum and natural gas in Turkey and Western Canada. As of Dec 31 2010, proven gross reserves for light and medium oil was 116 thousand barrels (net reserves of 104 thousand barrels); proven gross reserves for heavy oil was 10 thousand barrels (net reserves of 9 thousand barrels); proven gross reserves for natural gas was 1,047 million cubic feet (net reserves of 938 million cubic feet); and proven gross reserves for natural gas liquids was 26 thousand barrels (net reserves of 19 thousand barrels).
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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