Auctus on Friday - 15/12/2023
AUCTUS PUBLICATIONS________________________________________
ADX Energy (ADX AU)C; target price of A$0.65 per share: Narrowing uncertainty and resources range at Anshof - The Anshof-2 well encountered high quality Eocene sands with at least 12 metres vertical thickness and porosity of ~20%. The reservoir quality is much better than at Anshof-3 and the sands are ~5x thicker. The top of the Eocene sand was encountered ~40-50 m higher than expected, suggesting a much larger and flatter structure than expected in the P50 case. The oil water contact was also encountered higher than expected. With regards to oil volume calculations, this partially offsets the positive impact of the structure being larger. Overall, we now estimate the Anshof recoverable resources between the 2P and 3P case. The better-than-expected reservoir quality and thicker sands suggest better well deliverability and higher flow rates, which result in a higher production plateau and lower development cost with a positive impact on NPV. Analog wells in the area with similar reservoir characteristics have produced at rates ~1,000 bbl/d and recovered 1.8-2.0 mmbbl per well. This flow rate is significantly above the 400-500 bbl/d we assumed and the high recoverable volume per well could imply a lower well count to develop the 2P reserves (we currently assume five producers to develop ~5 mmbbl 2P gross reserves). Well site construction at Welchau has commenced.
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Criterium Energy (CEQ CN)C; target price of C$0.40 per share: Sale of Bulu unlocks value and transforms the company’s balance sheet – Criterium has signed a letter of intent to sell its 42.5% interest in Bulu for US$7.75 mm. US$2 mm will be received as a non-refundable deposit upon signing of the definitive agreement (expected imminently) and the remaining US$5.75 mm will be due upon closing, which is expected in 1Q24. The company acquired the interest in Bulu for US$1.6 mm. The sale price represents ~5x that amount. Completion of the transaction requires only customary notifications in New Zealand and Indonesia. The cash proceeds from the sale are equivalent to C$0.28 per share on the current 38.4 mm share count (before the previously announced equity financing) or C$0.08 per share post financing (139 mm shares). The US$7.5 mm proceeds represent a significant boost to the company’s balance sheet. The proceeds are expected to be applied to Mont d’Or. The total consideration can fund either 4-5 wells in Tungkal or the estimated equity component needed for the gas development or could be used to pay down the Mont d’Or debt. Criterium has previously announced a C$18.9 mm capital raise comprising a C$12.2 mm (~US$9 mm) convertible debt and C$6.7 mm (~US$4.5 mm) of new equity.
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Tethys Oil (TETY SS)C; target price of SEK100 per share: Production update in Oman – WI Production in November was 8,361 bbl/d. This is in line with our expectations and compares with 8,361 bbl/d in October.
Valeura Energy (VLE CN)C; target price of C$6.40 per share: Restarting Wassana – Production at Wassana has restarted, in line with management’s guidance. The drilling rig will be mobilized to Wassana in the coming days to drill three horizontal production wells. These wells are targeting deeper intervals. These zones have been partially developed in the past. Production from Wassana is expected to increase to >4,000 bbl/d including these three new wells. While this was expected, this is welcome news. We expect Valeura will post a strong 4Q23 given that there will be no cash tax payment during the quarter while the company might benefit from an additional lifting. 2024 is expected to be a year of production growth and we anticipate that Valeura will have replaced a large proportion of the reserves produced in 2023. In 2024, Valeura will also drill wells targeting reserve adds including at Wassana North, Jasmine and Nong Yao.
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Zephyr Energy (ZPHR LN)C; target price of £0.16 per share: Production update – Production data adjusted for uptime shows an average flow rate of 897 boe/d net to Zephyr since inception at the Slawson wells. YE23 production is expected to be between 1,450 and 1,700 boe/d.
IN OTHER NEWS
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AMERICAS
Frontera Energy (FEC CN): Exploration update in Guyana – 514-628 mmboe PMean unrisked gross prospective resources have been estimated across multiple Maastrichtian horizons in the northern portion of the Corentyne block. The company is looking for a farm-in partner.
LNG Energy (LNGE CN): Discovery in Colombia – The Bullerengue Oeste-5 exploration well encountered natural gas and oil pays at both the Chengue and Lower Porquero formations. 1.0 to 2.5 mmcf/d of natural gas and 30 to 80 bbl/d of oil at up to 21°API have been flowed on test from the Chenge formation.
Maha Energy (MAHA-A SS): Production update in Brazil – Production in Brazil was 2,216 boe/d in October and 2,055 boe/d in November.
EUROPE
Beacon Energy (BCE LN): Disappointing flow rate in Germany – Following the installation of the rod pump in the SCHB 2(2.) well, oil production has now stabilised at a rate of ~40 bbl/d. The company believes that this is due to the reservoir near the wellbore having been invaded with drilling fluids which are restricting flow rates.
DNO (DNO NO): Exploration and appraisal successes in Norway – 11-19 mmboe have been discovered at Kyrre taking the overall recoverable volumes at Ofelia and Kyrre to 27-52 mmboe. Following appraisal drilling at the Bergknapp/Åre discoveries in license PL836S, recoverable volumes are estimated at 50-100 mmboe.
Equinor (EQNR NO): Acquiring asset in Norway – Equinor is acquiring 30% WI in PL255 from Shell. The licence covers the Linnorn discovery with 25-30 bcm of natural gas (~700 bcf to 1.05 tcf).
Kistos (KIST LN): Production update – The Shetland Gas Plant in the UK is expected to restart in the next two weeks. The company has re-iterated its production guidance of 8.5-10.5 mboe/d.
Reabold Resources (RBD LN): Share buyback programme – Reabold plans to return £4 mm of excess cash to shareholders via a share buyback programme upon receipt of the £9.5 mm of deferred net proceeds from Shell.
Star Energy (STAR LN): Operating update in the UK – Star expects to produce ~2,090 boe/d in 2023. Cash balances as at 30 November were £2.9 mm with net debt of US£2.6 mm.
MIDDLE EAST AND NORTH AFRICA
Forza Petroleum (FORZ CN): Going private – Zeg Oil is offering to buy all the shares in Forza it does not own at a price of C$0.15 per share.
Gulf Keystone Petroleum (GKP LN): Operational update in Kurdistan – Gross sales averaged 30 mbbl/d in September, 37.2 mbbl/d in October, 21.5 mbbl/d in November at 21.9 mbbl/d between 1-11 December. The company held US$85 mm and no debt at 12 December. The Iraq-Turkey pipeline remains shut.
SUB-SAHARAN AFRICA
BW Energy (BWE NO): Offer from BW Group – BW Group is offering to buy its does not own in BW Energy at a price of NOK27 per share.
Invictus Energy (IVZ AU): Further gas bearing sands at Zimbabwe well – The Mukuyu-2 sidetrack encountered gas bearing sands in the Lower Angwa formation. Wireline log interpretation indicates a preliminary net pay estimate of 34.9 m across the Upper Angwa and Lower Angwa formations.
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.
DNO is a Norwegian exploration and production company focused on the Middle East and North Africa. Co. holds stakes in oil and gas blocks in various stages of exploration, development and production, both onshore and offshore, in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland.
Equinor is engaged in oil and gas exploration and production activities. Co. is primarily focused on exploration, development and production of oil and gas on the Norwegian continental shelf (NCS). Co.'s operations are organized into four segments. The Development and Production Norway and Development and Production International segments explore, develop, produce and extract crude oil, natural gas and natural gas liquids. The Marketing, Processing and Renewable Energy segment markets, trades, transports and processes oil and natural gas and renewable energy. The Other segment consists of global well and project delivery, research and develpoment, and business development.
Frontera Energy is a publicly traded oil and gas company engaged in the exploration, development and production of heavy crude oil and natural gas in Colombia, Peru, Brazil, and Guatemala.
Invictus Energy is engaged in the evaluation and exploration of coal bed methane (CBM) and unconventional gas in southern Africa.
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.
Reabold Resources is engaged in investing company in the natural resources sector.
Tethys Petroleum is an oil and gas exploration and production company focused on projects in Central Asia. Through its subsidiaries, Co. is engaged in the exploration for, and the acquisition, development and production of, oil and natural gas resources in Kazakhstan, Tajikistan and Uzbekistan.
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).
Rose Petroleum is an oil and gas (O&G) and mining company with exploration assets and an operational crushing and flotation mill. Co.'s principal activities are the exploration and development of O&G resources together with the evaluation and acquisition of other mineral exploration targets, principally gold, silver, uranium and copper, and the development and operation of mines in Mexico. In Co.'s O&G division, the area of focus is on two unconventional oil and gas basins in the U.S.: the Uinta Basin and the Paradox Basin. In its mining division, Co. continues its milling operations through its subsidiary, Minerales VANE S.A. de C.V., which owns the SDA Mill in Mexico.
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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