AUCTUS ON FRIDAY - 14/02/2025

AUCTUS PUBLICATIONS
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ADX Energy (ADX AU)C; Target price of A$0.30 per share: New acreage in Austria increases prospect inventory with a focus on low risk, shallow gas - ADX’s acreage in Austria has been modified to include additional near-term, low-risk gas prospects, as well as high-impact, higher-risk opportunities. One focus of the 2025 program is to drill shallow, low-risk, high initial production gas prospects that can be rapidly put into production. ADX has more than tripled the number of these prospects within its revised acreage positions at ADX-AT-I and ADX-AT-II, holding 100% WI in the new prospects. A typical well at a shallow gas prospect has an initial production rate of 10-15 mmcf/d.
The new acreage expands ADX's position around Welchau to include a potential extension of the still being tested and evaluated Welchau-1 , plus coverage of the Molln-1 gas condensate appraisal opportunity (previously outside the ADX acreage) and the follow-up Rossberg prospect. ADX also plans to drill follow-on development and exploration/appraisal wells in the Anshof area in 2025 .
See website for full report

Criterium Energy (CEQ CN)C; Target price of C$0.30 per share: Gas development capex only US$3-5 mm. FY25 debt repayment reduced by US$2 mm - FY25 oil production is expected to be 1,000-1,200 bbl/d with 8-12 work-overs costing US$0.04-0.07 mm per well (total of US$0.32-US$0.84 mm). This in line with our expectations (1,150 bbl/d production and ~US$1 mm capex). The capex requirement to reach first gas in 1Q26 at SE MGH based on modular LNG is now estimated at US$3-5 mm (we assumed US$5 mm). This is significantly lower than the initial estimate of US$14 mm, which included the construction of a short pipeline to the main trunk. Restarting the SEM-01 discovery well (which flowed at 8 mmcf/d during testing) is expected to result in initial gas production of approximately 4-7 mmcf/d. An additional well, to be drilled six months later, would increase gas production to around 8 mmcf/d. Criterium has negotiated US$2 mm in reduced debt payments for 2025, with further reductions likely available should the need arise. These reduced payments will see a ~US$0.3 mm/month reduction in cash outflow. This is very important for the balance sheet.
See website for full report

New Zealand Energy (NZE CN)C; Target price of C$2.70 per share: Tariki-5A flow constrained by liquid. First injection in gas storage by YE25 – Tariki-5A has been put on production at a stable rate of 1 mmcf/d plus 25-30 bbl/d of condensate. This is less than anticipated (2-5.5 mmcf/d during clean-up with deliverability estimates of ~12 mmcf/d based on wellhead data) due to liquid loading in the tubing and difficulties in managing liquid slugging at Waihapa after ~30 km of pipeline. NZE is considering remediation operations to reduce the amount of liquid production, which could increase wellhead pressure and potentially gas production. The high quality of the sands encountered at Tariki-5A allows NZE to accelerate the conversion of the Tariki field to gas storage, enabling the commencement of injection in 4Q25. Stage 1 of the development would target the injection of 10-15 mmcf/d and extraction of ~30 mmcf/d based on the existing Tariki-5A and Tariki-1A wells. Stage 2 would add a further well. Most of the required infrastructure for Stage 1 is already in place, except for the final stage compression required at the well site. An existing mobile unit currently at the Waihapa Production Station could potentially be modified to provide the necessary wellsite compression. Overall, the Tariki gas storage could store 25-40 bcf of gas. As we reduce our gas production forecasts for Tariki but revisit our valuation for the gas storage project, we have changed our target price to C$2.70 per share in line with our new ReNAV.
See website for full report

Valeura Energy (VLE CN)C; Target price of US$13 per share: 245% Reserves Replacement Ratio. 2C Resources ~x2.5. Decommissioning down by 35% – YE24 2P reserves were estimated at 50 mmbbl (up from 38 mmbbl at YE23). This represents a Reserves Replacement Ratio of 245%, significantly above our expectations of ~100%. The reserves revision reflects (1) upward revision of STOIIP estimates (the high achieved recovery factors suggest that the volumes initially in place had been underestimated), (ii), positive drilling results which reflect Valeura's application of advanced drilling and completion technologies including geosteering and inflow control and (iii) better well performance with lower decline rates than initially estimated. Nong Yao C is performing particularly well. The most significant reserves increases were for Jasmine (+6.8 mmbbl or +68%) and Nong Yao (+5.7 mmbbl or +51%). The expected end of field lives have been extended by 3-5 years. The PV for the decommissioning liabilities has been reduced by ~35% (to ~US$90 mm) since YE23 and ~50% since 1Q23. This reflects the benchmarking of costs to current decommissioning activities in Thailand. The auditor’s NPV10 for the YE24 2P reserves plus the YE24 net cash is >US$1 bn (C$13.6 per share). As we incorporate the new reserves and now assume production of 20-25 mbbl/d through to about 2030 (previously forecasted at around 20 mbbl/d in 2027 and 16.5 mbbl/d in 2028), we have increased our target price from C$11 per share to C$13 per share.
See website for full report

IN OTHER NEWS
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AMERICAS

Diversified Energy (DEC LN/US): Trading update in the USA – FY24 production was 791 mmcfe/d (843 mmcfe/d in 4Q24).

Frontera Energy (FEC CN): Licence in Guyana terminated? – The Guyana government has taken the position that the Petroleum Prospecting License for the Corentyne block has terminated.

Helium Evolution (HEVI CN): Positive well test results in the USA – The 10-36 Well has been tested at ~11.5 mmcf/d with 0.81% of helium.

Maurel & Prom: Acquiring gas assets in Colombia – Maurel is acquiring a 40% working interest in the Sinu-9 gas licence from NG Energy International for US$150 mm in cash. The gross 2P reserves on the field are estimated at 114 bcf with 130 bcf gross contingent resources and 131 bcf gross prospective resources.

EUROPE

Aker BP (AKERBP NO): 4Q24 results – 4Q24 production in Norway was 449 mboe/d. FY25 production is expected to be 390-420 mboe/d (increasing to >500 mboe/d in the 2030’s) with US$5.5-6.0 bn capex plus US$550 mm exploration spending and US$150 mm for abandonment. YE24 net debt was US$3.25 bn. YE24 2P reserves were 1.6 bnboe. The quarterly dividend has been increased by 5% to US$0.63 per share.

BlueNord (BNOR NO): 4Q24 results – 4Q24 net production in Denmark was 25.9 mboe/d increasing to 56 mboe/d in 4Q25. YE24 2P reserves are estimated at 182 mmboe. Plateau production at Tyra is now expected to be reached in February. Blue Nord is proposing a shareholder distribution of US$215 mm for 2024 to be made once the RBL completion test for Tyra is met.

bp (BP LN): 4Q24 results – Adjusted net earnings were US$1.17 bn with 2,358 mboe/d production. FY24 Reserves Replacement Ration was 50%. FY25 production is expected to be lower than in 2024.

EnQuest (ENQ LN): FY24 results and 2025 outlook – FY24 production was 40,736 boe/d including 12,759 boe/d for Kraken, 14,173 boe/d for Magnus, 3,328 boe/d for Golden Eagle and 8,149 mboe/d in Malaysia. YE24 net debt was US$386 mm. EnQuest expects to produce 40-50 mboe/d in 2025 with US$190 mm capex plus US$60 mm decommissioning expenditure.

Var Energi (VAR NO): 4Q24 results –FY25 production is expected to be 330-360 mboe/d with capex of US$2.3-2.5 bn. The company expects to maintain production at around 400 mboe/d in 2026 and organically sustain production between 350-400 mboe/d towards 2030 with annual capex of US$2-2.5 bn. Var held 2P reserves of 1.2 bnboe at YE24 with 0.9 bnboe contingent resources. The company expects to increase its dividend distribution to US$300 mm in 1Q25 (4Q25: US$270 mm).

MIDDLE-EAST AND NORTH AFRICA

United Energy: Acquiring production in Egypt – United is acquiring 11 mboe/d production across 8 onshore concession areas in the Western Desert from Apex International Energy.

EVENTS TO WATCH NEXT WEEK
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17/02/2025 – Galp Energia (GLP LI): 4Q24 results
19/02/2025 – PetroTal (PTAL LN/TAL CN): Reserves update
20/02/2025 – Repsol (REP SM): 4Q24 results
20/02/2025 – Ithaca Energy (ITH LN): 4Q24 update