Report
Stephane Foucaud

AUCTUS ON FRIDAY - 16/02/2024

AUCTUS PUBLICATIONS
________________________________________
ADX Energy (ADX AU)C; target price of £A$0.65 per share: Drilling update in Austria – The well site construction at the Welchau-1 drill site is complete. The drilling rig is expected to become available to ADX on 14 February. The rig move and rig assembly will take ~6 days after rig release. Drilling operations are expected to commence on 20 February with a duration of ~39 days.

PetroTal (PTAL LN/TAL CN)C; target price of £1.45 per share: Replacing >165% of 2P reserves in 2023 and increasing 4Q23 dividend – YE23 1P, 2P and 3P reserves were estimated at 48 mmbbl, 100 mmbbl and 200 mmbbl respectively. This represents an increase of 6%, 4% and 19% respectively compared to YE22. The YE23 1P and 2P reserves estimates imply a Reserves Replacement Ratio of 150% and 167% during 2023. The increased reserve estimates reflect improved recovery factor assumptions (from 24% to 26% in the 2P case) with 3 additional development wells. The YE23 Original Oil in Place assumptions are broadly unchanged compared with YE22. The company has also declared a dividend of US$0.020 per share. This compares to a base dividend of US$0.015 per share.
See website for full report

Tethys Oil (TETY SS)C; target price of SEK100 per share: Production update in Oman – WI production at Blocks 3&4 was 8,502 bbl/d in January.

Valeura Energy (VLE CN)C; target price of C$6.40 per share: Wassana: strong performance and accelerated drilling programme. Cost reduction at Nong Yao – The first two wells of the Wassana drilling programme have exceeded the company’s expectations with production from the field now over 4,000 bbl/d. With a third well expected to boost production further in the next few days, production from the field could be higher than the target of 4.5 mbbl/d. The company has decided to extend the current drilling programme at Wassana by adding two wells (from 3 to 5). These additional wells were previously expected to be drilled later in 2024. Drilling the two additional wells immediately after the first three wells could both have a positive impact on the FY24 production guidance and also be source of cost optimization. Valeura is acquiring the Nong Yao’s Aurora FSO for US$19 mm. The Aurora FSO is currently being leased on the field. Buying the FSO will allow Valeura to reduce its opex for the field. We have provisionally assumed payback on the investment within 24-36 months. We have left our production forecast for 2024 unchanged for the time being. As we incorporate the acquisition of the Aurora FSO and the resultant lower opex and revisit the mechanics of the potential tax restructuring, we re-iterate our target price of C$6.40 per share. We continue to anticipate that Valeura will replace a significant proportion of its production in 2023.
See website for full report

Zephyr Energy (ZPHR LN)C; target price of £0.16 per share: Drilling permit of key well received – Zephyr has received state and federal Sundry Notice approvals for the amendment of the drilling permit related to the twinned redrill of the State 36-2 well. These are the final regulatory approvals required to spud the State 36-2R well in the Paradox Basin. This is a key well for the company that could add reserves, derisk resources and unlock the development of the asset.

IN OTHER NEWS
________________________________________
AMERICAS

Maha Energy (MAHA-A SS): Production update in Brazil – January production was 2,415 boe/d.

Blue Star Helium (BNL AU): Operating update in the USA – Initial testing and evaluation at the Bolling #4 SESW well resulted in gas to surface flow of >4% helium under vacuum with flow up to 0.27 mmcf/d. Initial testing of the BBB #33 well delivered 0.018 mmcf/d with ~3.0% helium.

Frontera Energy (FEC CN): Operating update in Colombia and Ecuador. Initiating a dividend – FY23 production was 40,919 boe/d. in 2024, Frontera expects to produce 40-42 mboe/d with US$400-475 mm capex including US$155-160 mm in Guyana. Frontera is initiating t a quarterly dividend of C$0.0625 per share payable quarterly. The company has also launched a share buyback programme for up to 3.95 mm shares.

Parex Resources (PXT CN): Operating update in Colombia – As a result of protests, Parex shut-in its operations at the Capachos Block and halted drilling and testing operations at the Arauca Block on 22 January. Since then and until 11 February, the estimated overall production of the company was ~53,200 boe/d with current production of ~50,000 boe/d. The company's FY24 production guidance remains 54,000 to 60,000 boe/d.

ASIA PACIFIC

Baron Oil (BOIL LN): Raising new equity for Timor-Leste – Baron has raised £3.26 mm of new equity at a price of 0.05 p per share. The proceeds from the raise will be applied to Chuditch and specifically towards a rig deposit, the drilling project team, a site survey, certain long lead items and a bank guarantee.

Jadestone Energy (JSE LN): Potentially acquiring Australian assets – Jadestone is participating in the process for the divestment process of Woodside Energy’s interests in the Macedon producing gas field and a cluster of producing oil fields in the Pyrenees Area. Woodside’s net WI production from the Macedon field and Pyrenees Area averaged ~28,000 boe/d in 2H23. Trading in the shares of Jadestone has been suspended.

Woodside Energy (WDS AU/LN): Reserves update – YE23 1P reserves and 2P reserves were 2,450 mmboe and 3,757 mmboe. The best estimate (2C) contingent resources were 5,902 mmboe. The YE23 2P reserves represent a reserve replacement ratio of 158%.

EUROPE

Eni (ENI IM): 4Q23 results – Adjusted net profit for the period was EUR1.6 bn with 1.71 mmbbl/d production.

EnQuest (ENQ LN): Operating update – FY23 production was 43,812 boe/d with US$481 mm net debt at YE23. FY24 production guidance is 41-45 mboe/d with US$270 mm capex.

Galp Energia (GALP LS): 4Q23 results – YE23 net debt was EUR1.4 bn. The FY24 dividend has been increased by 4% to €0.54 per share. The company is launching a EUR350 mm share buyback programme.

Ithaca Energy (ITH LN): Operating update in the UK – FY23 production was 70.2 mmboe/d with YE23 net debt of US$572 mm.

Star Energy (STAR LN): 4Q23 results – YE23 2P reserves in the UK were estimated at 17.5 mmboe.

TotalEnergies (TTE FP)/Eni (ENI IM): Successful appraisal in Cyprus - The Cronos-2 well has confirmed a well production capacity in excess of 150 mmcf/d. The well has encountered the same carbonate reservoir sequence as Cronos-1, confirming hydraulic communication and connected thick gas column with excellent permeability intervals.

Var Energi (VAR NO): 4Q23 results and dry holes – 4Q23 production was 225 mboe/d. YE23 2P reserves plus 2C resources were estimated at ~2 bn boe. YE23 net debt was YS$2.4 bn. The company has declared a US$270 mm dividend for 1Q24 in line with 4Q23. Var is expecting to produce 280-200 mboe/d in 2024 with US$2.7-2.9 bn capex. The Hubert and Magellan prospects drilled on production licence 917 were dry.

FORMER SOVIET UNION

Caspian Sunrise (CASP LN): Operating update in Kazakhstan – Currentnproduction at BNG is ~1,900 bbl/d. Caspian sells its crude domestically at a price of US$32-34/bbl.

MIDDLE EAST AND NORTH AFRICA

ShaMaran Energy (SNM CN): Reserves update in Kurdistan – YE23 WI 2P reserves were estimated at 65.4 mmbbl. The company also holds 41.5 mmbbl 2C contingent resources (WI).

EVENTS TO WATCH NEXT WEEK
________________________________________
20/02/2024: Gran Tierra Energy (GTE CN/LN/US) – FY23 results
22/02/2024: Panoro Energy (PEN NO) – FY23 results
22/02/2024: Repsol (REP SM) – FY23 results
Underlyings
Baron Oil

Baron Oil is an independent oil and natural gas exploration company. Co. owns exploration acreage in the U.K. and Peru. The principal activity of Co. is that of oil and gas exploration and production.

BLUE STAR HELIUM LTD

Antares Energy is an exploration and production company pursuing oil and gas opportunities located onshore Texas in the U.S. Co.'s principal activity includes hydrocarbon production and exploration. Co. has exploration leases for the following projects located in in Texas: Oyster Creek, Southern Star, Big Star, Northern Star, and Hawkville. As of Dec 31 2012, Co.'s estimated total proved reserves were approximately 15.2 million barrels of oil equivalent (MMboe), proved and probable were approximately 53.2 MMboe and proved, probable and possible were approximately 66.8 MMboe.

Caspian Sunrise

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.

Eni S.p.A.

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.

EnQuest PLC

Enquest is an oil and gas production and development company. As of Dec 31 2016, Co.'s principal U.K. assets were its interests in the producing operated oil fields Heather/Broom, Thistle/Deveron, the Dons area, the Greater Kittiwake Area, Alma/Galia and Scolty/Crathes. In addition, Co. had interests in the Kraken development and also a non-operated interest in the producing Alba oil field. In Malaysia, Co.'s operated assets comprise the PM8/Seligi Production Sharing Contract and the Tanjong Baram Risk Services Contract. At Dec 31 2016, Co. had proven and probable reserves of 215.0 million barrels of oil equivalent.

Frontera Energy Corp

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.

GALP Energia SGPS SA Class B

Galp Energia is a holding company. Through its subsidiaries, Co. operates in the following segments: exploration and production, with activities relating to exploration, development and production of hydrocarbons, particularly in Angola, Brazil and Mozambique; refining and marketing, which owns refineries in Portugal and also includes activities relating to the retail and wholesale commercialization of oil products; and gas and power, which covers the purchasing, commercialization, distribution and storage of natural gas and electric and thermal power production. As of Dec 31 2014, Co. had proved and probable reserves of 638.0 million barrels of oil equivalent.

ITHACA ENERGY PLC

Jadestone Energy

Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.

Maha Energy

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.

Parex Resources Inc.

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).

Shamaran Petroleum Corp.

Shamaran Petroleum is a Canadian-based oil and gas company engaged in the business of oil and gas exploration and development. Co. is in the pre-production stages of an exploration and development campaign in respect of petroleum properties located in the Kurdistan Region of Northern Iraq.

Tethys Oil AB

Tethys Oil AB is a Sweden-based energy company. The Company is focused on oil and gas exploration and production onshore areas with known discoveries. Its core area of focus is the Sultanate of Oman, where the Company holds licence interests in three onshore blocks. Tethys Oil has licences in three countries altogether: Oman, Lithuania and France. Two of the licenses are in production, namely Blocks 3 & 4 in Oman and Gargzdai in Lithuania. During 2013 the Company also had licenses in Sweden, however, they have expired and were not renewed. As of December 31, 2013, the Company had 10 wholly owned subsidiaries active in Sweden, Gibraltar, Switzerland and the British Virgin Islands, such as Tethys Oil Denmark AB, Tethys Oil Spain AB and Tethys Oil Turkey AB, among others.

Total SE

Total is an international integrated oil and gas company also active in solar and biomass energy sources. Co. engages all aspects of the petroleum industry, including Upstream operations (oil and gas exploration, development and production, and LNG (Liquefied Natural Gas)) and Downstream operations (refining, petrochemicals, specialty chemicals, marketing and marketing and trading and shipping of crude oil and petroleum products). In addition, Co. is engaged in the coal mining and power generation sectors. Co.'s worldwide operations are conducted through three business segments: Upstream, Refining & Chemicals, and Marketing & Services.

Valeura Energy Inc.

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).

WOODSIDE PETROLEUM LTD

Zephyr Energy

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.

Provider
Auctus Advisors
Auctus Advisors

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. 

Analysts
Stephane Foucaud

Other Reports on these Companies
Other Reports from Auctus Advisors

ResearchPool Subscriptions

Get the most out of your insights

Get in touch