AUCTUS ON FRIDAY - 22/11/2024
AUCTUS PUBLICATIONS________________________________________
ADX Energy (ADX AU)C: Portion of deeper target at Welchau flows water on test – Two intervals (total of ~16 m) in the Steinalm formation. were tested at a stable rate (natural flow) of 240-290 bbl/d of drilling mud, likely contaminated formation water and some oil traces. Gas was initially observed at surface. While the achieved flow rate highlights the high permeability of the natural fractures, the absence of hydrocarbons is disappointing and surprising given the results of the logs, the inflow of gas while drilling, the analysis of the retrieved cores (with indication of hydrocarbons) and the fact that oil samples were recovered from this interval. The well is now being flowed while ADX is running a downhole production logging tool to analyse the contribution of the various sections of the well to flow. One possible explanation is that the water could come from a different water zone connected to the well through the fractures that run vertically. We note that only a small portion of the Steinalm formation (>100 m thick) has been tested so far. The shallower Reifling interval (not tested yet) is also >100 m thick.
Condor Energies (CDR CN)C: Operating update and equity financing – Condor has launched a C$10 mm private placement priced at C$1.90 per share. Production in Uzbekistan has increased further to 11,066 boe/d (10,706 boe/d last week).
Corcel (CRCL LN)C: Acquisition of Brazilian asset – Corcel is acquiring an option to buy 20% WI in the IRAI gas field from Petroborn. The company has also a Right-of-First Refusal (ROFR) over the remaining 80% and another ROFR for 100% of the adjacent TUC-T-172 exploration block, located in the state of Bahia, onshore Brazil. The IRAI gas field has produced 0.39 mmboe since it started production in 2018. One well is currently online, producing 117 boe/d. A full field development of the field could take production to >1,000 boe/d. The option requires Corcel to provide a loan of approximately US$0.55 mm to Petroborn for two workovers in Q1 2025. If the option is not exercised, the loan will be repaid in full. If the option is exercised, upon doing so, Corcel will advance a capped US$2.95 mm for additional development activities over a two-year period, in two tranches. The first tranche of US$0.85 mm will fund one development well in the first half of 2025. A follow-on funding 1H26 of US$2.1 mm will support further development through mid-2026.
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Panoro Energy (PEN NO)C; Target price of NOK51 per share: Production reaching 13 mbbl/d. Two high impact wells by end of 1Q25 – There were no surprises in the 3Q24 accounts. Since last week, WI production has increased from 12.5 mbbl/d to 13 mbbl/d. Gross production in Gabon continues to be ~40 mbbl/d. Three further workovers for ESP installation are planned during 4Q24. The nameplate capacity of the FPSO could be increased by 10% to 44 mbbl/d. Gross production in EG stands at 29 mbbl/d. The second infill well is starting production and could take overall gross production in EG to 35 mbbl/d. This new well could add ~800 bbl/d net to Panoro’s 14.25% WI. Panoro is considering longer term sources of debt and could replace its existing RBL with a cheaper bond. With capex of only ~US$40 mm in 2025, we continue to forecast free cashflow of ~ US$120 mm in 2025. As a result, the company’s financials will be much more resilient to lower oil prices. We also anticipate an increase in shareholder distributions. The dividend yield for 2024 is already 6.8%. Adding 1.1% share buybacks so far in 2024 suggests at least 7.9% will be returned to shareholders in 2024. Results of the Akeng Deep well in EG (180 mmbbl - Panoro WI: 12%) with an unrisked NAV of ~NOK15 per share are expected by YE24 and we anticipate that the Bourbon prospect in Gabon (29 mmbbl – Panoro WI: 17.5%) with an unrisked NAV of ~NOK4 per share will be drilled in 1Q25.
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Pulsar Helium (PLSR CN)C: Target price of £0.90 per share: Agreement With Chart Industries for Helium and CO2 Capture And Production – Pulsar has signed an agreement with Earthly Labs, a subsidiary of Chart Industries (NYSE: GTLS, market capitalisation approx. US$7.1 bn), that outlines a procurement roadmap, specific to Pulsar's needs, and facilitates access to advanced gas processing technologies, including helium and carbon dioxide capture, essential for servicing a potential production scenario at Pulsar's flagship Topaz project in Minnesota.
Sintana Energy (SEI.V CN)C; Target price of C$1.85 per share: Pure play on the world’s exploration hotspot –~11 high impact appraisal/exploration wells will be drilled on various licences in Namibia over the coming months. This is very material and is expected to attract the attention of investors. Sintana provides exposure to three out of the six licences with high impact drilling. We believe that the recent weakness of Sintana’s share price offers an opportunity with an asymmetric risk/reward profile. We estimate that Sintana’s current share price trades at a discount to the market value of its interests in the Mopane discovery (PEL 83) that could be crystalized by an upcoming partial divestment process initiated by Galp. While further exploration and appraisal drilling is expected to take place before a sale is agreed, Sintana’s costs are carried by Galp. The 4 well programme at PEL 83 is expected to include 2 exploration wells that could have a material impact on the size of the hydrocarbon volumes on PEL 83. Increasing the size of Mopane by 20% would add C$0.24/sh. Chevron will also start drilling at PEL 90 by YE24. Sintana holds an indirect 4.9% WI in PEL 90. Not much detailed information is available but PEL 90 is adjacent to the licence with the Venus discovery. Our unrisked NAV for Sintana’s interest in PEL 90 is C$0.79/sh as Sintana is carried for this well. We anticipate that Woodside will exercise its option to farm into PEL 87 to also start exploration activities in 2025. Sintana would be carried until development. Our unrisked NAV is C$1.77/sh. Rhino Resources and Azule Energy (bp/Eni) will also start drilling at PEL 85 around YE24 (2 wells). The block is located to the south east of PEL 83 and a success could have positive implications for the prospectivity of PEL 83. BWE Energy is also expected to drill 2 exploration wells near the Kudu field to test different plays. As we incorporate the latest readthrough value of transactions in Impact Oil & Gas, we have increased our target price to C$1.85/sh in line with our new ReNAV.
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Tethys Oil (TETY SS)C; Target price of SEK80 per share: Production update in Oman – WI production from Blocks 3&4 in October was 8,102 bbl/d.
IN OTHER NEWS
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AMERICAS
ExxonMobil (XOM US): Withdrawing from Suriname Block – ExxonMobil has withdrawn from Block 52.
ATOME (ATOM LN): received debt proposal for green ammonia project – IDB Invest is offering a debt facility of US$200 mm to ATOME.
Helix Exploration (HEX LN): Helium exploration results in USA – A gas sample from the deep Flathead formation (~8,000’ deep) tested 2.5% helium and 55.2% H2. However the formation did not flow. The shallower Charles formation did not flow either. The company believes that the formation was damaged by high mud losses. The shallower Amsden formation was tested at 4.25 mmcf/d of raw gas. The company did not indicate if there was helium. The absolute open flow is estimated at 8 mmcf/d of raw gas.
Pantheon Resources (PANR LN): Private placement to repay bond – Pantheon is raising ~US$2.6 mm of new equity at a price of £0.2266 per share with the convertible bondholders. The proceeds will be used to settle the quarterly principal repayment of US$2.45 mm and quarterly interest of ~US$0.17 mm.
Seacrest Petroleo (SEAPT NO): 3Q24 results – 3Q24 production in Brazil was 6,843 boe/d. The company held net debt of US$398 mm at the end of September.
EUROPE
EnQuest (ENQ LN): Operating update – In early November, an unplanned outage at the Ninian Central Platform shut in all system users, including Magnus production. The production has now returned to pre-outage levels. Due to the impact of the Ninian outage, EnQuest now expects FY24 production to be slightly below the 41 to 45 mboe/d guidance range. FY24 capex is expected to total ~US$250 mm, with a net reduction in 2024 free cashflow of ~US$15 mm. The FY25 drilling programme at Kraken could not be agreed between the JV partners.
Ithaca Energy (ITH LN): 3Q24 results – Production in the UK over the first nine months of 2024 was 52,501 boe/d. Ithaca has announced a special dividend of US$20 mm. Production is expected to reach >120 mboe/d during 4Q24. The FY24 production guidance has been re-iterated. Net debt at the end of September was US$543 mm. The FY24 capex for Rosebank is expected to be at the top end of the US$170-195 mm guidance.
FORMER SOVIET UNION
Enwell Energy (ENW LN): Suspension of Ukraine licences – The State Geologic and Subsoil Survey of Ukraine has issued orders to suspend the company's MEX-GOL, SV and VAS production licences in Ukraine.
Nostrum Oil & Gas (NOG LN): 3Q24 results – 3Q24 production was 13,758 boe/d.
EVENTS TO WATCH NEXT WEEK
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28/11/2024: Energean (ENOG LN) – 3Q24 update
Week of the 25/11/2024: Southern Energy (SOUC LN/SOU CN) - 3Q24 results
Week of the 25/11/2024: Criterium Energy (CEQ CN) - 3Q24 results
Regency Mines is engaged as a natural resource exploration and development company. Co. manages a balanced portfolio of mineral and oil and gas projects and investments at different stages of development. Co. is active in multiple international locations including the U.K., Papua New Guinea, the U.S. and Greenland.
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.
Regal Petroleum is an independent oil and gas company focused on gas and condensate field development in Ukraine. Co. is engaged in the oil and gas exploration, development and production. Co. developed its Mekhediviska-Golotvshinska and Svyrydivske gas and condensate fields in north-eastern Ukraine, which were held under 100% owned and operated production licenses, as of Dec 31 2016. Co.'s subsidiary, LLC Prom-Enerho Produkt holds a production license over the Vasyschevskoye gas and condensate field, which also includes the Vvdenska prospect, located in the Dnieper-Donets basin in the north-east of Ukraine.
Exxon Mobil operates or markets products in United States and other countries through its divisions and affiliated companies. The company's business involves exploration for, and production of, crude oil and natural gas and manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and other products. In United States, the company's development activities are focused on the onshore United States, in the Permian Basin of West Texas and New Mexico and the Bakken oil play in North Dakota. Gas development activities are also focused on the Marcellus Shale of Pennsylvania and West Virginia, the Utica Shale of Ohio and the Haynesville Shale of East Texas and Louisiana.
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.
Pantheon Resources is engaged in the investment in oil and gas exploration and development. Co. operates in the U.K. through its parent undertaking and in the U.S. through subsidiary companies. Co. operates in two reportable segments: USA and Head Office. Non-current assets, income and operating liabilities are attributable to the USA, whilst most of the corporate administration is conducted through Head Office. As of June 30 2017, Co. held 58% working interest in the VOBM#1 & VOBM#2H wells in Polk County. Co. also held 75% working interest in VOBM#4 in Tyler County.
Sintana Energy is a development stage company engaged in oil and gas exploration and development activities in the United States.
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.
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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