AUCTUS ON FRIDAY - 08/03/2024
AUCTUS PUBLICATIONS________________________________________
Panoro Energy (PEN NO)C; target price of NOK47 per share: Hibiscus South on stream at 5-6 mbbl/d – The Hibiscus South well has been put in production at a rate of 5-6 mbbl/d. Once stabilized this should take production at Dussafu to ~30 mbbl/d.
Pulsar Helium (PLSR CN)C; target price of C$0.80 per share: High Helium concentration at high impact appraisal well – The Jetstream #1 appraisal well at the Topaz helium project in Minnesota encountered helium shows while drilling, with helium concentration of up to 12.4% according to the on-site spectrometer. The helium shows were encountered at depths of 1,750 – 2,200 feet (TD: 2,200 feet). The helium mudlog gas composition increased from 3.7% to 5.1% over the period. Due to the significant air volumes pumped into the well during the drilling process, these measurements are considered to be a minimum value due to dilution by atmospheric contamination. The well has been logged with results expected to provide further information on the reservoir. The company is particularly looking to understand the fracture network and water and gas inflows. Ahead of the well testing results, we have increased our chance of commercial success from 40% to 50%. We increase our target price from C$0.80 per share to C$1.20 per share. Our unrisked NAV for the 0.26 bcf of contingent resources of helium at Topaz is C$1.74 per share. The recently acquired passive seismic suggests a potentially much larger prize. 0.3-1.0 bcf of additional resources could add C$1.80-7.00 per share (unrisked).
See website for full report
Zephyr Energy (ZPHR LN)C; target price of £0.12 per share: Gearing-up for the return to drilling in the Paradox – 4Q23 production in the Williston was 1,053 boe/d. This only reflects oil and natural gas production. Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d). While production reached 1,440 boe/d in late November (~1,650 boe/d including NGL), 4Q23 production was negatively impacted by the curtailment of production from the new Slawson wells in mid-December due to adverse weather condition and infrastructure constraints. Production from the Slawson wells resumed in late January. During February, ten additional wells were placed on production adding ~75 boe/d net production. The wells are performing ahead of expectations. With regulatory approvals in place, depending on rig availability, drilling of the State 36-2 well could start in April or May. We are cautiously reducing our production forecast in 1Q24 to ~1.1mboe/d by deferring 1/3 of 1Q24 production to 2Q24 and 3Q24. As we revisit our production forecast and activity assumptions for the Paradox in 2024, we have changed our target price to £0.12/sh in line with our new ReNAV. Overall production is expected to increase by 250% by 4Q24 (compared to the FY23 average production) and the drilling programme could unlock the Paradox (£0.13/sh unrisked just for the 2C contingent resources) and the Salt Wash helium (£0.03/sh unrisked for the 0.13 bcf of helium).
See website for full report
IN OTHER NEWS
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AMERICAS
Active Energy (AEG LN): Receiving cash from settlement – Active Energy has received US$1.65 mm in cash from PDI pursuant to a settlement agreement.
Alvopetro Energy (ALV CN): Production update in Brazil – Alvopetro has sold 1,477 boe/d in February.
Challenger Energy (CEG LN): Farm in transaction in Uruguay – Challenger is selling 60% WI in the AREA OFF-1 block to Chevron in return for US$12.5 mm in cash and a 100% carry on the 3D seismic cost up to a maximum of US$15 mm (net to Challenger’s share of cost). Should Chevron decide to drill an initial exploration well on the AREA-OFF 1 block, Chevron will carry 50% of Challenger’s share of costs associated with that well, up to a maximum of US$20 mm net to Challenger.
Frontera Energy (FEC CN): 4Q23 results and reserves update in Colombia and Ecuador – 4Q23 production in Colombia and Ecuador was 39,267 boe/d with US$318 mm net debt at YE23. YE23 2P reserves were estimated at 164.1 mmboe (YE22: 174.8 mmboe).
LNG Energy (LNG CN): Operating update in Colombia – LNG expect to produce 40-44 mmcf/d by YE24 with US$10-12 mm capex. 4Q23 production was ~18 mmcf/d plus ~200 bbl/d of condensate.
Touchtone Exploration (TXP LN/CN): Drilling Update in Trinidad – The Cascadura-2 well encountered wellbore instability issues due to high gas pressures which resulted in the need to sidetrack a portion of the well.
ASIA AND AUSTRALASIA
Conrad Asia Energy (CRD AU): Raising further equity for Indonesia - Conrad has raised a further A$2.85 mm of new equity on the same terms as the previously announced A$13 mm placement. The proceeds will be used to complete a 3D seismic survey across the shallow water Aceh gas discoveries and continued project costs associated with the Mako gas project.
EUROPE
BlueNord (BNOR NO): Production update in Norway – February production was 22.9 mboe/d.
Harbour Energy (HBR LN): FY23 results – FY23 production was 186 mboe/d. The company held 880 mmboe 2P reserves plus 2C contingent resources at YE23 (YE22: 865 mmboe). YE23 net debt was US$0.2 bn. The company will pay a US$100 mm final dividend for 2023 (total of US$200 mm for FY23). FY24 production is expected to be 150 165 mboe/d with US$1.2 bn capex. FY25 production is expected to be similar to 2024. Production to end of February was 172 mboe/d. The acquisition of Wintershall Dea is expected to complete in 4Q24.
Hartshead Resources (HHR AU): Uncertain timing and economics at key UK project - Hartshead is assessing project economics associated with the proposed Labour party tax changes. The project timeline is also currently uncertain following possible delay to award of contracts for capital items. Hartshead has also highlighted the drop in UK gas price, impacting further the economics of the project.
Serica Energy (SQZ LN): Reserves and production update in the UK – YE23 2P reserves were 140 mmboe (+10 mmboe vs YE22 net of 14 mmboe production during 2023). Net production in January and February was ~45.5 mboe/d. The FY24 production guidance of 41-48 mboe/d is unchanged.
UK: Windfall tax extended by a year – The 35% additional EPL (total UK tax rate of 75%) has been extended by one year until 2029. The Labour party has indicated that if elected, the EPL would be increased so that the headline tax rate would be 78%. The investment allowance on the EPL which currently provides oil and gas producers with 91.4% tax relief on capital expenditure would be cancelled.
FORMER SOVIET UNION
Block Energy (BLOE LN): Resources update in Georgia – Rustavi and Telei are now estimated to hold 1.7 tcf 2C Contingent Resources.
Condor Energy (CDR CN): Acquiring gas producing assets in Uzbekistan – Condor has initiated production enhancement operations of an integrated cluster of eight conventional natural gas-condensate fields. Condor will be responsible for all costs of the project, and in exchange for performing its services, it will receive a percentage of net revenues realized from the project.
MIDDLE EAST AND NORTH AFRICA
ShaMaran (SNM CN): 4Q23 results – YE23 net debt was US$193 mm. YE23 WI 2P reserves in Kurdistan were 65.4 mmbbl (YE22: 68.3 mmbbl). YE23 WI 2C resource were 41.5 mmbbl. Sarsang gross production in 4Q23 was 36.4 mbbl/d with current gross production of ~38.0 mbbl/d and. Due to the continued closure of the ITP and the unpredictability of the local sales market in Kurdistan, the Company has not provided production guidance for 2024.
SUB-SAHARAN AFRICA
Africa Oil (AOI SS/CN), Eco Atlantic (ECO LN/EOG CN): Farm-out transaction in South Africa to TotalEnergies (TTE FP) and Qatar Energy – Africa Oil and Eco Atlantic are selling respectively 9.25% and 6.25% interests in Block 3B/4B in the Orange basin to Total. In return, Total will pay Africa Oil and Eco a staged total cash amount of US$10 mm and US$6.7 mm respectively. Total will also provide a full carry for Africa Oil and Eco’s retained share of costs (up to a cap) that will be repayable from production.
Eni (ENI IM): Discovery in Cote d’Ivoire – The Murene 1X exploration we encountered 1-1.5 bn boe at Calao.
Helium One (HE1 LN): Well test result in Tanzania – A DST of the Itumbula Est-1 well yielded 0.5 mmcf/d with 4.7% helium from a fractured Basement and faulted zone.
Invictus Energy (IVZ AU): FY23 results – Fluid at the Mukuyu-2 well is estimated to hold 14-22 bbl/mmcf condensate yield.
Noble Helium (NBE AU): Operating update in Tanzania – Following the analysis of logs together with seismic, the company now believes that there could be a large gas cap at Mbelele that could be a major structural feature stretching up to 9 km north to south and 3 km east to west.
Tullow Oil (TLW LN): FY23 results – FY23 production was 62.7 mboe/d with net debt US$1.6 bn. The FY24 production guidance has been set at 62-68 mboe/d with US$320 mm capex. The company held 2P reserves of 212 mmboe at YE23 (YE22: 229 mmboe). The company has added ~9 mmbbl 2P reserves in Gabon given the strong performance of the asset (+3 mmbbl) and the extension of several licences (+6 mmbbl). Reserves were also added at Jubilee while the 2P reserves at TEN were reduced. US$301 mm were impaired at TEN.
EVENTS TO WATCH NEXT WEEK
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13/03/2024: Var Energi (VAR NO) – Capital Market Day
13/03/2024: VAALCO Energy (EGY US/LN) – FY23 results
14/03/2024: Eni (ENI IM) – Capital Market Day
Africa Oil is an international oil and gas exploration company based in Canada with oil interests in Kenya, Ethiopia, Puntland (Somalia) and Mali. Co. is an exploration stage enterprise that participates in oil and gas projects located in sub-Saharan Africa.
Alvopetro Energy is a resource company and is engaged in the exploration for, and the acquisition, development and production of, hydrocarbons in the Reconcavo, Tucano, Camamu-Almada and Sergipe-Alagoas basins in onshore Brazil. Co. develops producing hydrocarbons by appraising and developing existing discoveries and exploring in areas considered by management to be prospective for hydrocarbon resources. Co.'s assets consist of interests in three producing fields and 16 exploration blocks comprising 148,500 gross acres onshore Brazil.
Bahamas Petroleum is engaged in oil and gas exploration in the Commonwealth of the Bahamas. Co. and its subsidiaries hold several oil and gas exploration licenses issued by the government of the Commonwealth of the Bahamas.
Block Energy plc, formerly Goldcrest Resources plc, is an oil and gas company. The Company's projects include norio onshore oil field, east kavtiskhevi (block VIII), akoko asheba gold project and Mauritania copper. Norio project is 35 kilometres from the centre of Tbilisi, requiring low capex recompletions of existing wells and new horizontal wells, to existing production. East kavtiskhevi (block VIII), which consist 36.9 MMbbl risked resources in Cretaceous, 4,700 kilometers area and multiple prospective horizons. Asheba project is located at the southern end of the Ashanti belt 15km east of Endeavour Mining's Nzema mine and 30 kilometers south of the world class Tarkwa mine. At Asheba, mineralisation is centered on the old Cheriamen and Atinasi mining sites within multiple parallel steep dipping zones associated with intense silicification, disseminated pyrite and a stockwork of quart veinlets. Mauritania project is an exploration concept.
Eco (Atlantic) Oil & Gas is an oil and gas exploration company focused on petroleum opportunities in Namibia. Through its wholly owned Namibian subsidiary, Eco Namibia, it holds five petroleum licenses issued by the Government of the Republic of Namibia. Eco Namibia holds three offshore license blocks covering more than 25,000 square kilometers (6,177,000 acres), in the Walvis Basin. Eco Namibia also holds two onshore license blocks covering 30,000 square kilometers (7,413,000 acres).
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.
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.
Serica Energy is an independent oil and gas company with production, development and exploration licence interests in the U.K. Continental Shelf and exploration interests in Ireland, Morocco and Namibia. As of Dec 31 2016, Co. had proved plus probable reserves of 3.8 million barrels of oil equivalent, which consisted of 2.1 million barrels of oil and 10.40 billion cubic feet of gas.
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.
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.
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.
Tullow Oil is an independent oil and gas exploration and production company. Co.'s focus is on finding oil in Africa and South America. Co.'s primary activities include targeted exploration and appraisal, selective development projects and growing its production. As of Dec 31 2017, Co.'s portfolio included 90 licences in 16 countries. Co.'s operations are organized into three business delivery teams: West Africa; East Africa; and New Ventures. As of Dec 31 2017, on a working interest basis, Co. had commercial reserves of 245.7 million barrels of oil, 268.90 billion cubic feet of gas, and 290.5 million barrels of oil equivalent (petroleum).
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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