AUCTUS ON FRIDAY - 17/05/2024
AUCTUS PUBLICATIONS________________________________________
Arrow Exploration (AXL LN/CN)C; target price of £0.50 per share: Spudding high impact well – Drilling operations have started at the Carrizales Norte B Pad Horizontal Well 1. This is the first horizontal well drilled in the Ubaque on Tapir. Three more horizontal wells will be drilled on the pad. Delivering good flow rates at these wells will be very important for future production growth. Arrow held US$12.4 mm in cash at the beginning of May.
Chariot (CHAR LN)C; target price of £0.50 per share: Drilling update onshore Morocco – The main target at Gaufrette (onshore Morocco) was water wet. While the reservoirs were thicker and of better quality than expected with multiple gas shows, the trap did not work and the reservoirs are interpreted to be water bearing. Given the presence of water in the upper reservoirs at the main target, it was decided not to deepen the well to drill the secondary deeper target. Our ReNAV for the well was £0.02 per share. The presence of gas and good reservoir quality is a positive for future exploration in the area. The Gaufrette well was drilled on time and on budget, in line with expectations. Chariot will now drill the Dartois prospect onshore Morocco. The well, which is expected to spud in the coming days, is targeting a different reservoir system and trapping style to the Gaufrette prospect. The main target at Dartois is estimated to hold 12 bcf gross prospective resources. Success would derisk a total of 20 bcf gross prospective resources (+8 bcf) in the Dartois area. A rig-less well test would be run in the case of success. Our unrisked NAV for the well is £0.05 per share with a ReNAV of £0.02 per share. The key near-term news flow remains the Anchois East well expected to spud in 3Q24.
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GeoPark (GPRK US)C; target price of US$30 per share: Entering the Vaca Muerta – GeoPark is acquiring 49.5 mmboe 2P reserves (>90% light oil), 118 mmboe 3C contingent resources and ~5 mmboe unconventional production across four blocks in the oil window of the Vaca Muerta in Argentina from a subsidiary of Mercuria. The Vaca Muerta in Argentina is a hot spot for unconventional development and a strategic area for most supermajors and YPF. The formation is estimated to hold 16 bn bbl of oil and 300 tcf of natural gas and produces >350 mbbl/d (x4 since 2019). The asset package being acquired by GeoPark includes 45% of Mata Mora Norte (including all the reserves and production and 140-160 well locations), 45% of Mata Mora Sur (23 mmboe net 3C resources), and 50% of Confluencia Norte and Confluencia Sur (95 mmboe net 3C resources) over 79,000 gross acres. There are 152-220 potential locations on the exploration blocks. GeoPark will pay US$190 mm in cash and provide a gross exploration carry of up to US$113 mm over two years. In addition, US$11 mm is being paid for midstream capacity according to the WI and a potential US$10 mm bonus payment contingent is due on exploration success at Confluencia Norte.
The acquisition provides a new area of growth in a very attractive location. We are increasing our target price from US$26/sh to US$30/sh.
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New Zealand Energy (NZ.V CN)C: Completing equity financing – New Zealand has raised C$5 mm of new equity at a price of C$0.75 per share. The proceeds of the financing will fund a development programme to grow production to ~10 mmcf/d (net to New Zealand).
Panoro Energy (PEN NO)C; target price of NOK50 per share: Discovery in Gabon. Reiterating production guidance – The Hibiscus South exploration well on the Dussafu permit has encountered 25 m of pay in an overall hydrocarbon column of 35 m in the Gamba formation. This discovery could add ~5-6 mmbbl gross recoverable reserves (~1 mmbbl net to Panoro). The Hibiscus South structure is a separate accumulation with a deeper oil-water contact than the nearby Hibiscus Field. Importantly, a production well could now be drilled at Hibiscus South and tied to the MaBoMo facility, which would boost the overall wellhead production capacity. With the recently completed well at Ruche expected to be put on stream this quarter and the upcoming work-over of the fourth well at Hibiscus, this gives greater confidence in the objective of reaching ~40 mbbl/d gross production in Gabon. Panoro has re-iterated its FY24 production guidance of 11-13 mbbl/d. The key newsflow over the coming 12 months is the drilling of the Akeng Deep and Bourdon prospects with respective unrisked NAV of ~NOK16/sh and NOK5/sh respectively.
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Pulsar Helium (PLSR CN)C: target price of C$1.80 per share: Commencement of works at high impact well – Well activities are expected to occur in three phases of work activities over approximately two weeks. The initial phase will focus on additional downhole data acquisitions, followed by a second phase of wellhead and wellbore works in preparation for the final phase which consists of the flow testing and pressure build-up program. A flow rate could be announced as early as next week. Our unrisked NAV for the company based on a 5 mmcf/d (gross gas) development is ~C$2.20 per share.
Zephyr Energy (ZPHR LN)C; target price of £0.12 per share: Operating update in the USA – 1Q24 production in the Williston Basin was in line with management's expectations.
IN OTHER NEWS
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AMERICAS
i3 Energy (I3E LN): 1Q24 operating update in Canada – 1Q24 production was 19,410 boe/d. Net debt at the end of March was US$21 mm.
Maha Energy (MAHA-A SS): Production update in Brazil – Production in April was 1,901 boe/d.
Touchstone Exploration (TXP LN/CN): 1Q24 results – 1Q24 production was 7,015 boe/d. Net debt at the end of March was US$27.6 mm. Although Cascadura field production has declined more than originally anticipated, the company currently forecasts maintaining the previously announced FY24 production guidance. A feasibility study to determine the potential benefits of a stimulation program has commenced.
ASIA AND AUSTRALASIA
Georgina Energy: Helium business reserve into UK listed company – Georgina Energy is reversing into Mining Minerals & Metals (MMM LN). Georgina holds exploration and appraisal assets in Australia with natural gas, helium and hydrogen.
Harbour Energy: Discovery in Indonesia – A significant discovery has been made at the Tangkulo-1 exploration well (Harbour: 20%).
EUROPE
Equinor (EQNR NO): Asset swap in Norway – Currently, Equinor holds an equity interest in the Heidrun field of 13.0%, while Petoro has an equity interest of 57.8%. For Tyrihans, Equinor’s ownership is 58.8%, while Petoro does not hold any equity. Following the completion of the transaction, Equinor will own 34.4% in Heidrun and 36.3% in Tyrihans, while Petoro will own 36.4% in Heidrun and 22.5% in Tyrihans. Equinor ownership of Johan Castberg will be 46.3%.
Kistos Energy (KIST LN): FY23 results – FY23 pro forma production in the UK, Netherlands and Norway was 8.8 mboe/d. YE23 2P reserves were estimated at 27.9 mmboe. Net debt on 30 April was EUR148 mm.
Harbour Energy (HBR LN): Operating update – 1Q24 production was 172 mboe/d including 161 mboe/d in the UK. Net debt at the end of March was US$0.1 bn, down from US$0.2 bn at YE23.
FORMER SOVIET UNION
Caspian Energy (CASP LN): Potential sale of assets in Kazakhstan – Caspian has entered into an agreement to grant exclusivity to Absolute Resources in connection with the proposed conditional sale of the MJF and South Yelemes structures at the BNG Contract Area for a consideration of US$83 mm. Production from MJF is currently 1.35 mbbl/d while South Yelemes produced 243 bbl/d in 2023. The headline consideration, less the amount then outstanding for the assessed historic costs expected to be around US$15 mm by the likely date of completion, would be payable in cash, with Absolute Resources assuming responsibility for the payment of the balance of the assessed historic costs then due.
Condor Energies (CDR CN): 1Q24 results – March production in Uzbekistan was 65.4 mmcf/d plus 264 bbl/d of condensate.
MIDDLE EAST AND NORTH AFRICA
Gulf Keystone Petroleum (GKP LN): Update in Kurdistan – Gross sales in Kurdistan in 2024 until 11 May were 37 mbbl/d. Sales in March and April were respectively 44,100 bbl/d and 38,900 bbl/d. Volumes have since recovered, with sales in May to date averaging ~48,300 bbl/d. Realised prices increased from ~US$25/bbl to US$27/bbl. The company is launching a US$10 mm share buyback programme.
Serinus Energy (SENX LN): 1Q24 results – 1Q24 production was 635 boe/d including 586 boe/d in Tunisia and the balance in Romania. The company had a working capital deficit of US$5.4 mm including US$0.6 mm in cash at the end of March.
Tag Oil (TAO CN): Well test results in Egypt –During the clean-up stage, the BED4-T100 horizontal well flowed over 1,000 bbl/d of fluid per day, with oil production in the range of 400 to 800 bbl/d from the Abu Roach “F” reservoir. The well is currently producing at ~1,000 bbl/d of fluid, with 759 to 800 bbd/d of oil (less than 30% water-cut) and is expected to continue to clean up under natural flow for the next 2 to 3 weeks before being put on pump, which could result in even higher flow rates.
SUB-SAHARAN AFRICA
Africa Energy (AFE CN, AEC SS): 1Q24 update – The company held US$1.6 mm in cash at the end of March. Africa Energy holds interest in a large natural gas discovery in South Africa and is waiting for presidential approval for the recently approved upstream petroleum resources development bill before considering its next steps.
Africa Oil (AOIS SS/CN): 1Q24 results – 1Q24 WI production in Nigeria (net to Africa Oil’s 50% WI in Prime) was 17.1 mboe/d. Africa Oil’s net cash at the end of March was US$195.5 mm. In addition, Prime’s net debt attributable to Africa Oil’s 50% stake was US$241 mm. In April 2024 Africa Oil received a US$$25.0 mm dividend distribution from Prime, net to its 50% shareholding. Africa Oil has reiterated its guidance for 2024.
Benin bans oil export from Niger – Media reports highlighted that Benin is forbidding the use of its port to export crude from Niger. The crude is transported in a new 2,000 km Chinese pipeline.
Tullow Oil (TLW LN): Operating update – 1Q24 production was ~59 mboe/d including 36 mbbl/d at Jubilee, 10 mbbl/d at TEN and 13 mboe/d in Gabon and Cote d’Ivoire.
EVENTS TO WATCH NEXT WEEK
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20/05/2024 – Union Jack Oil (UJO LN): FY23 results
23/05/2024 – Ithaca Energy (ITH LN): 1Q24 results
23/05/2024 – Panoro Energy (PEN NO): 1Q24 results
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.
Front Range Resources is engaged in oil and natural gas exploration and production focusing on horizontal multi-stage frac development in Montney, Bluesky, Wilrich and Falher formations in the Deep Basin area of west central Alberta.
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.
Chariot Oil & Gas is an independent oil and gas exploration company focused offshore in West Africa with a portfolio of assets located in the under-explored regions of Namibia, Mauritania and Morocco.
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.
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.
Serinus Energy is engaged in the exploration for and development of oil and gas properties in Ukarine, Brunei and Syria.
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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