AUCTUS ON FRIDAY - 11/04/2025

AUCTUS PUBLICATIONS

Arrow Exploration (AXL LN/ CN)C; Target price of £0.70 per share: Stable production, 10% cash increase – Net production is currently exceeding 4.5 mboe/d, consistent with January levels. The CN HZ10 well, located in the northern area of the CN field, commenced production on 31 March, delivering 1,183 bbl/d of oil (591 bbl/d net to Arrow) with a 21% water cut from the Ubaque reservoir. The well is in the process of cleaning up, with the water cut gradually decreasing. The CN HZ09 well, situated in the southern area of the field, is producing 244 bbl/d of oil (122 bbl/d net) from the Ubaque reservoir. The well initially encountered a high water cut of 90%, which is now stable. Arrow believes the elevated water cut at CN HZ09 is due to its suboptimal location near the CN4 vertical water injector well, resulting in water coning. However, Arrow remains confident that the oil reserves and resources in this part of the field are intact. Gross production at Alberta Llanos is now 460 bbl/d (230 bbl/d net) with the recently discovered Guadalupe reservoir now in production. Arrow held US$25.1 mm in cash on 01 April (+US$2.4 mm vs 01 February). We have changed our target price to £0.70 per share. It reflects (1) a lower production FY25 profile (5.1 mboe/d instead of 6.1 mboe/d) incorporating current production and a more prudent production build-up during 2025 and (2) lower Brent price assumptions for 2Q25 and 3Q25 (US$60/bbl vs. US$75/bbl previously).
See website for full report

PetroTal (PTAL LN/TAL CN)C; Target price of £1.20 per share: Another strong quarter – 1Q25 production was 23,280 bbl/d, comprising 22,660 bbl/d at Bretana and 620 bbl/d at Los Angeles. 1Q25 production at Bretana was ~1 mbbl/d above our expectations. The high production reflects the strong performance of the recent wells. Well 23H produced 3,363 bbl/d in March, reaching a maximum daily high of 5,110 bb/d. Well 22H, which was brought onstream in mid-January, produced an average of 4,386 bbl/d in March. The company has re-iterated its FY25 production guidance of 21,000 bbl/d to 23,000 bbl/d. Field work for the erosion project is expected to commence at Bretana next month. Drilling at Los Angeles is expected to start in early 2H25. PetroTal has significant flexibility to adapt its capital program to changes in oil pricing. Additional colours could be provided with the 1Q25 results in mid-May. At the current share price, the expected FY25 dividend yield is greater than 16%. As we reduce our assumptions for Brent price over 2Q25 and 3Q25 from US$75/bbl to US$60/bbl, we have changed our target price to £1.20 per share.
See website for full report

Pulsar Helium (PLSR LN/CN)C; Target price of £0.85 per share: US$4 mm project finance facility – Pulsar has executed a US$4 mm project finance facility line of credit note.

Sintana Energy (SEI.V CN)C; Target price of C$1.80 per share: Galp reports ~875 mmboe 3C contingent resources at PEL 83 – Galp’s independent auditor estimated approximately 700 mmboe of 3C contingent resources net to Galp for Namibia as of the end of November 2024, translating to ~875 mmboe gross 3C contingent resources or 43 mmboe net to Sintana. The resources estimate is based on AVO-1, AVO-2 and AVO-3 and does not include the impact of the results of the Mopane-2A and Mopane-3X wells. Mopane-2A confirmed the lateral extent of AVO-3 and encountered a hydrocarbon column of light oil at AVO-4. Mopane-3X encountered columns of light oil and gas condensates in two new intervals (AVO-10 and AVO-13). This suggests that the contingent resources reported by Galp probably underestimates the volumes of hydrocarbons encountered so far. Even assuming only US$3-4/boe would value Sintana’s share of Mopane’s 3C resources at the end of November at ~C$0.45-C$0.60 per share. This excludes the resources associated with AVO-4, AVO-10 and AVO-13. Note that Galp funds Sintana’s share of capex to first oil, which has positive implications for Sintana’s valuation. The current share price has returned to levels not seen since before the initial exploration success at Mopane.
See website for full report

Southern Energy (SOUC LN/SOU CN)C; Target price of £0.25 per share: First recompletion expected by the end of 2Q25 – Southern has raised US$5 mm in new equity at a price of 3.8p per share (C$0.07 per share). Investors participating in the transaction will also receive a full warrant for each new share, with an exercise price of 4.8p per share (C$0.09 per share). US$3.1 mm of outstanding convertible debenture will be converted into equity on the same terms. This capital injection allows Southern to complete the three drilled and uncompleted (DUC) wells, drilled in 1Q23 at Gwinville and to drill two vertical Cotton Valley wells at Mechanicsburg. The completion of the first DUC is expected to occur before the end of 2Q25. We forecast that Southern will produce ~4.0 mboe/d in 2026, up from ~2.2 mboe/d currently. As we incorporate the revised terms of the financing, we have changed our target price to £0.25 per share. There are 80-90 locations at Gwinville not included in the 2P reserves. This represents >40 mmboe resources upside to the ~30 mmboe YE24 2P reserves. Derisking the 45 additional drilling locations in the Lower Selma Chalk and 30+ additional locations in the Gwinville City Bank could add £0.12 per share to our valuation. Our unrisked NAV for the Williamsburg and Mechanicsburg assets is £0.24 per share.
See website for full report

Valeura Energy (VLE CN)C; Target price of C$12 per share: Lower oil prices could generate acquisition opportunities – 1Q25 production averaged 23.9 mboe/d, which is in line with previous indications. This included a planned seven-day annual maintenance shutdown at the Nong Yao field near the end of the quarter. Production resumed on 1 April. Valeura has re-iterated its FY25 production guidance of 23-25.5 mbbl/d. FID for the Wassana redevelopment is still anticipated in 2Q25, with first oil expected in early-2027, though the company has indicated that it will "review and optimise its expenditures" given the current volatile market, presumably to ensure it keeps the balance sheet strong to capitalize on acquisition opportunities. The Ratree prospect, with prospective resources of 3.4–41.9 mmbbl (mid-case: 19.4 mmbbl), is scheduled for drilling around mid-2025. If successful, it could support a new development with dedicated infrastructure. The unrisked NAV for this prospect represents approximately 40% of the current market cap. The lower oil price environment could be beneficial to Valeura’s acquisition strategy. Even assuming US$60/bbl for Brent from 2Q25 to YE27, we forecast net cash of respectively US$270 mm, US$365 mm and US$480 mm at YE25, YE26 and YE27. Our YE27 net cash forecast represents ~75% of the current market cap. As we reduce our Brent price assumptions for 2Q25 and 3Q25 from US$75/bbl to US$60/bbl, we have changed our target price to C$12.00 per share.
See website for full report

Zephyr Energy (ZPHR LN)C; Target price of £0.12 per share: Good connection between well State 36-2 (Paradox basin) and reservoir. Well test about to start – The well was perforated with 98 cuts across a total of 16 stages targeting optimised sections of the reservoir. The pressure response during the cutting operations suggests the wellbore has good connection to the highly pressured Cane Creek reservoir. The well was treated with acid, as planned, to maximise near-wellbore formation permeability. The company will shortly commence production testing. This is a very high impact well that will add reserves and production. Our unrisked NAV for the 2C resources in the Paradox basin is £0.13 per share.

IN OTHER NEWS
________________________________________
AMERICAS

Helium Evolution (HEVI CN): Expanding private placement with ENEOS for helium in Canada – The C$2.7 mm equity financing by ENEOS Xplora has been expanded from C$2.7 mm to C$4.5 mm. The price of the C$1.8 mm expansion has been set at C$0.19 per share (vs C$0.17 per share for the initial C$2.7 mm). ENEOS will also receive one half of a warrant with an exercise price of C$0.57 per share for each new share.

ASIA AND AUSTRALASIA

Coro Energy (CORO LN): Selling interests in Indonesia gas asset – Coro is selling its 15% interests in Duyung to Conrad Energy (CRD AU) for US$0.3 mm in cash upfront. Coro will also be issued 0.5 mm Conrad shares on receipt of government approval. On first production, Coro will receive an additional US$0.75 mm in Conrad shares.

Tag Energy (TAO CN): Selling assets in New Zealand – Tag is selling its New Zealand royalty interests for US$2.3 mm in cash plus an additional milestone payment of up to US$0.3 mm by YE27.

EUROPE

Aker BP (AKERBP NO): 1Q25 update – 1Q25 net production was 441.4 mboe/d.

Blue Nord (BNOR NO): Operating update in Denmark – In March, production was 25.2 mboe/d net to BlueNord. The base assets, Dan, Gorm and Halfdan produced 19.6 mboe/d and 5.5 mboe/d was produced from the Tyra hub.

bp (BP LN): 1Q25 update – 1Q25 production is expected to be lower than in 4Q24.

Kistos (KIST LN): FY24 results – FY245 production in the Netherlands was 8,050 boe/d. Year-end 2P reserves of 24.4 mmboe and estimated 2C contingent resources of 57.5 mmboe. YE24 adjusted net debt was US$52 mm. Kistos expects to produce 8-9 mboe/d in 2025. Balder in Norway is expected to start production shortly. The Victory gas field in the UK is expected to come on stream in 4Q25.

OMV (OMV AG): Operating update – 1Q25 production was 310 mboe/d.

Prospex Energy (PXEN LN): Operating update in Spain and Italy– Net production is ~2.5 mmcf/d. There has been a reduction of the flow rates achieved from the Viura production facility since the initial high rates seen in January. The Viura-3 well was worked over to convert it into a water injection well in December 2024/January 2025. However, it was determined that Viura-3 is not a candidate for water injection.

Repsol (REP SM): 1Q25 trading update – 1Q25 production was 540 mboe/d.

Shell (SHEL LN): 1Q25 update – 1Q25 production is expected to be 2,700-2,840 mboe/d.

Var Energi (VAR NO): 1Q25 update in Norway – 1Q25 production was 272 mboe/d. Vår Energi expects to reach the mid-point of the FY25 production guidance of 330-360 mboe/d and >400 boe/d I 4Q25.

FORMER SOVIET UNION

Enwell Energy (AENW LN): 1Q25 update in Ukraine – 1Q25 net production was 1,865 boe/d. There have been no production or field operations at the MEX-GOL, SV and VAS fields respectively since the reinstatement of the suspensions of the MEX-GOL and SV licences on 22 January and the VAS licence on 27 February.

SUB-SAHARAN AFRICA

PetroNor E&P (PNOR NO): 1Q25 update in Congo – 1Q25 net production was 4.3 mboe/d.

EVENTS TO WATCH NEXT WEEK
________________________________________
14/04/2025 – Galp Energia (GLAP LI): 1Q25 update