AUCTUS ON FRIDAY - 28/02/2025
AUCTUS PUBLICATIONS________________________________________
Condor Energies (CDR CN)C; Target price of C$5.60 per share: 2nd success at bypassed carbonate formation intervals boosts production to >12 mboe/d - Condor has successfully perforated and brought online bypassed carbonate formations at a second well. As a result, production has increased from 11,455 boe/d reported last week to an average of 12,004 boe/d over the last six days. Using a combination of legacy data and reprocessed 3-D seismic data, five additional well candidates with similar geologic characteristics have been identified. These will be worked over sequentially, with each well taking approximately two weeks. Condor is on track to increase production to 14-15 mboe/d by mid-2025, and 15.5-17 mboe/d by YE25.
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Corcel (CRCL LN)C; Target price of 1.00p per share: Successful workover in Brazil - The EI-1 well at the Irai gas field in Brazil has been tested at a rate of 120 boe/d (~0.7 mmcf/d). The well had been shut-in since 2022. This test rate exceeds our forecast of ~0.5 mmcf/d for the first quarter of production, achieved within three months from signing the agreement with Irai's owner. Once onstream, production from the EI-1 well will boost production from the existing EI-3 well, which we estimate at ~0.6-0.7 mmcf/d. The next step involves working over a second well before deciding on the option to acquire 20% of Irai. Corcel also holds a Right-of-First Refusal (ROFR) on the remaining 80%, as well as another ROFR for 100% of the adjacent TUC-T-172 exploration block. Total production, including the two work-overs, is expected to reach ~1.2 mmcf/d over a 12-month period. If Corcel decides to exercise the option to acquire 20% of Irai, it 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 new development well in 1H25. A follow-on funding of US$2.1 mm in the first half of 2026 will support further development through mid-2026. Given that Irai is a producing field, program is expected to be funded by offtakers or through debt financing. A typical well has an Initial Production (IP) rate of ~210 boe/d gross production, recovers ~0.2 million barrels of oil equivalent (mmboe), and costs less than US$1 mm. A total of four new wells could take peak production to ~1,000 boe/d. The next potential catalyst is the acquisition of an additional interest in KON-16. An additional 5% interest has an unrisked Net Asset Value (NAV) of ~0.40 pence per share. Successful drilling of a post-salt target at KON-16 (~100 mmbbl) in Angola, assuming a 49.5% net interest, could add ~1.00 pence per share, with a further unrisked value of 3.10 pence per share for the pre-salt target (~300 mmbbl).
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GeoPark (GPRK US)C; Target price of US$17 per share: Reserves in Colombia down but ahead of our expectations - YE24 2P reserves excluding Argentina were estimated at 87.6 mmboe. After deducting 12.4 mmboe of production in 2024, the 2P reserves have reduced by 15.1 mmboe. As anticipated, the primary driver of the reserves reduction is associated with Colombia, with YE24 2P reserves at 84.8 mmboe, down from 106.4 mmboe at YE23. The YE24 2P reserve position in Colombia is ~12 mmboe ahead of what we carry in our model. We value Llanos-34, Llanos-32, and CPO-5 assuming a production blowdown, with natural declines only partially offset by drilling activities. The YE24 2P reserves in Ecuador are estimated at 1.6 mmboe, compared to 7.1 mmboe at YE23, due to thinner net pays and poorer well performance than expected. The 74.6 mmboe 2P reserves in Argentina had been reported previously.
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Panoro Energy (PEN NO)C; Target price of NOK46 per share: Increasing shareholder distributions to >15% of the current market cap at US$70/bbl – FY24 production, YE24 cash and debt had been reported previously. FY25 production is expected to be 11-13 mbbl/d with only US$35 mm capex. We have trimmed our production forecast from 13.1 mbbl/d to 12.5 mbbl/d and our capex estimates from US$40 mm to US$35 mm. The highlight of the announcement is the significant increase in shareholder distributions. Panoro has declared a NOK80 mm dividend for 4Q24, up from NOK50 mm in 3Q24. In 2025, Panoro plans to distribute NOK500 mm, including quarterly dividends of NOK80 mm for each of 1Q25, 2Q25 and 3Q25, bringing the annualised dividend to NOK320 mm. The remaining balance will be allocated to special dividends and share buybacks. This targeted distribution is based on a Brent price of US$70/bbl and could be increased if the oil price is higher—we forecast ~US$74 per bbl for Brent in 2025. This already represents 15.9% of the current market capitalization. From 2026, Panoro is permitted to distribute up to 50% of free cash flow.
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Serica Energy (SQZ LN)C; Target price of £3.00 per share: OFAC licence renewed – The OFAC License and secondary sanctions assurance relating to the Rhum field, previously extended by two months to the end of March 2025 have now been renewed, with a new two-year License ending on 28 February 2027.
Sintana Energy (SEI.V CN)C; Target price of C$2.00: New material discovery at Mopane – The Mopane-3X exploration well has encountered columns of light oil and gas-condensates across the AVO-10 interval, as well as light oil columns at AVO-13 and at a deeper sand. The sandstone reservoirs are of excellent quality, with high permeability and porosity, and higher-than-estimated pressure. The oil has low viscosity, with minimal CO2 and H2S content. This new discovery has multiple positive implications. It could open up a new development area in the southeast of PEL-83, with increased discovered volumes and further exploration potential. The confirmation of high-quality reservoirs addresses industry and investor concerns about the low reservoir quality at Shell's PEL-39. The discovery of light oil is another positive, as it enhances the commercial potential of PEL-83 and reduces the significance of gas in the overall resource mix. This could lead to a simpler and faster development process. Although the extent of the resources has not been disclosed, the discoveries at Mopane-3X increase the value of the block and the expected farm-in terms that Galp could achieve. As we increase our valuation of Mopane based on expected farm-in terms, we have raised our target price for Sintana to C$2.00 per share. Woodside is expected to make a decision about farming into PEL-87 in early April. Sintana holds a 7.3% net interest in the licence and is carried to the Final Investment Decision.
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IN OTHER NEWS
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AMERICAS
Alvopetro Energy (ALV CN): Reserves update in Brazil – YE24 2P reserves were estimated 9.1 mmboe (+5% vs. YE23). The company also holds risked best estimate contingent resources of 4.5 mmboe and risked best estimate prospective resources of 10.2 mmboe.
ATOME (ATOM LN): Anchor investor in Paraguay project – ATOME has signed non-binding heads of terms with Hy24, whereby Hy24 will invest US$100-115 mm in the project as the anchor and lead equity investor. The terms value ATOME's stake in the Villeta Project at US$60 mm.
Canacol Energy (CNE CN): FY25 guidance for Colombia – Canacol expects to produce 146-159 mmcfe/d in 2025 with capex of US$143-US$160 mm. .
Gran Tierra Energy (GTE CN/LN/US): 4Q24 results – 4Q24 production in Colombia, Canada and Ecuador was 41,009 boe/d. YE24 net debt was US$683 mm. YE 2P reserves were estimated at 293 mmboe.
Helium Evolution (HELI CN): Operating update in Canada – The 5-30 Well flowed ~9.7 mmcf/d with helium content of 0.76%.
Chevron (CVX US): US government to revoke Venezuela oil licence – The US government is considering revoking the licence that allows Chevron to operate in Venezuela.
ASIA AND AUSTRALASIA
Jadestone Energy (JSE LN): Trading update and FY25 outlook – FY24 production was 18,696 boe/d (2023: 13,813 boe/d). Jadestone was estimated to hold YE24 2P reserves of 68.3 mmboe (reserves replacement ratio of 104% as a result of the inclusion of M&A activities). 2C contingent resources were estimated at 125.7 mmboe at YE24. The company expects to produce 19,000-22,500 boe/d in 2025 with capex of US$75-95 mm.
EUROPE
Aker BP (AKERBP NO): Dry hole in Norway – The Bounty Updip prospect was dry.
bp (BP LN): Strategy update – bp is increasing oil & gas investment to ~US$10 bn per year to grow production to 2.3–2.5 mmboe/d in 2030. The company has launched a strategic review of Castrol. Investments in transition businesses will amount to US$1.5–2 bn per year, over US$5 bn per year lower than the previous guidance. Annual capex is reduced to US$13–15 bn to 2027. The company is planning US$20 bn divestments by 2027.
Eni (ENI IM): 4Q24 results. Strategy update. Combining assets in South East Asia with Petronas – 4Q24 adjusted net profit was EUR892 mm with 1.72 mmboe/d production. Eni and Petronas have signed a Memorandum of Understanding to establish a joint venture holding company to oversee selected upstream assets in Indonesia and Malaysia. Both companies believe that this joint venture will become a major LNG player in the region, while delivering in the medium term a sustainable 500 mboe/d production. The joint venture will combine approximately 3 bnboe of reserves with an additional 10 bnboe of potential exploration upside. The overall shareholder payout is expected to be in the range of 35-40% of CFFO, raised from 30-35% previously. In the event of upside in cash generation, 60% of the additional cash will be distributed to shareholders. For 2025 Eni is proposing a dividend of EUR1.05/share, up 5% and a share buyback initially set at EUR1.5 bn with upside up to EUR3.5 bn. Production is expected to grow by 2-3% per annum between 2028 and 2030 with EUR7 bn per year capex. Eni expects to launch the new CCUS satellite company in 2025.
Prospex Energy (PXEN LN): Trading update – Net production in Spain and Italy is 3.1 mmcf/d.
Star Energy (STAR LN): Trading update – FY24 net production in the UK was 1,989 boe/d. The company anticipates production of ~2,000 boe/d in 2025 with ~£11 mm capex. YE24 cash was £4.7 mm, excluding restricted cash of £4.3 mm, and Star Energy has drawn £12.2 mm under its loan facility.
Var Energi (VAR NO): Discovery in Norway – 15-43 mmboe (recoverable) have been discovered at Zagato.
FORMER SOVIET UNION
Caspian Sunrise (CASP LN): Funding for Kazakhstan – Caspian has entered into conditional and non-binding heads of terms with a middle east financial institution for that institution to invest US$72.5 mm for a 50% stake in the BNG residual asset, following the disposal of the BNG shallow structures. A total of US$85 mm would then be available to further develop the BNG deep structures, of which the Caspian Sunrise Group would contribute net new funds of US$12.5 mm.
SUB-SAHARAN AFRICA
Africa Oil (AOI SS/CN): 4Q24 results – FY24 WI production in Nigeria was ~17 mboe/d. YE24 WI 2P reserves were estimated at 50.8 mmboe (YE23: 52.2 mmboe). YE24 net debt including Africa Oil’s interest in Prime was ~US$114 mm.
Kosmos Energy (KOS US/LN): 4Q24 results – 4Q24 production was 65,700 including 38,600 boe/d in Ghana, 18,200 in the USA and the balance in EG. YE24 2P reserves were estimated at 528 mmboe, representing a ~137% 2P reserve replacement ratio. Kosmos’ 2P reserves do not include any recognition for the Tiberius and Yakaar-Teranga discoveries. YE24 net debt was US$2.7 bn. The company expects to spend US$400 mm capex in 2025.
Orca Energy (ORC.A/B CN): Reaching agreement for gas sales in Tanzania/Unfavourable court ruling – Orca has reached an agreement with Tanzania Petroleum Development Corporation and the Tanzania Portland Cement Company in respect to a new gas sales agreement. The gas price under the new agreement is lower than that of the 2008 agreement. Orca has received a judgment from the Tanzanian High Court for a claim brought by a contractor about the early termination of a contract relating to a 3D seismic acquisition program. The Court ordered damages in the aggregate of US$23.1 mm plus legal costs and interest at a rate of 7% per annum be paid by Orca to the contractor.
EVENTS TO WATCH NEXT WEEK
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04/03/2025 – Seplat Energy (SEPL LN): 4Q24 results
05/03/2025 – GeoPark (GPRK US): 4Q24 results
06/03/2025 – Harbour Energy (HBR LN): 4Q24 update
Aker BP ASA engages in the exploration, development, and production of petroleum resources on the Norwegian Shelf. In addition, Co. has a separate Johan Sverdrup business unit to manage its interest.
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.
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.
Chevron is engaged in energy and chemicals operations. Upstream operations consist primarily of, among others, exploring for, developing and producing crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas, storage and marketing of natural gas; and a gas-to-liquids plant. Downstream operations consist primarily of, among others, refining crude oil into petroleum products; marketing of crude oil and refined products; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives.
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.
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.
Gran Tierra Energy, together with its subsidiaries, is a company focused on oil and gas exploration and production in Colombia. Co. is primarily engaged in the exploration and production of oil and natural gas. Co. has one reportable segment based on geographic organization, Colombia. As of Dec 31 2017, Co. had total estimated proved reserves of 59.3 million barrels of oil and natural gas equivalent, consisting of 58.9 million barrels of oil and 2.1 million cubic feet of natural gas.
IGas Energy is engaged in exploring for, appraising, developing and producing oil and gas. Co. has producing assets in Scotland, East Midlands and the Weald Basin and is seeking to develop shale resources across its acreage position focusing on the East Midlands, Yorkshire and the North West of England. As of Dec 31 2016, Co. had proved plus probable reserves of 13.4 million barrels of oil equivalent, which consisted of 12.7 million barrels of oil and 3.95 billion cubic feet of gas.
Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.
Kosmos Energy is a holding company. Through its subsidiaries, the company operates as a deepwater independent oil and gas exploration and production company focused along the Atlantic Margins. The company's assets include production offshore Ghana, Equatorial Guinea and U.S. Gulf of Mexico, as well as gas development offshore Mauritania and Senegal. The company also maintains a sustainable exploration program balanced between proven basin infrastructure-led exploration (Equatorial Guinea and U.S. Gulf of Mexico), emerging basins (Mauritania, Senegal and Suriname) and frontier basins (Cote d'Ivoire, Namibia and Sao Tome and Principe).
Orca Exploration Group is an international company engaged in hydrocarbon exploration, development and supply of gas in Tanzania, the establishment of a coastal gas pipeline network in East Africa, oil appraisal and gas exploration in Italy and the acquisition of exploration opportunities in Europe and 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.
Sintana Energy is a development stage company engaged in oil and gas exploration and development activities in the United States.
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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