AUCTUS ON FRIDAY - 10/10/2025

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AUCTUS PUBLICATIONS
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Serica Energy (SQZ LN)C; Target price of £3.05 per share: Another operational setback at Triton; value and distribution profile intact – Operational issues with the flare system at the Triton FPSO have resulted in a temporary suspension of production. Production is likely to restart shortly at very low rates until the root cause is identified and resolved. In the absence of further clarity, we conservatively assume that Triton production will be constrained until the scheduled Bittern pipeline shutdown in November. We now forecast 2025 group production of 27.5 mboe/d, revised down from 30.8 mboe/d. Reflecting the 2025 disruption, we have also increased our downtime assumptions for 2026, now forecasting ~45.3 mboe/d. As volumes are deferred rather than lost, we assume a shallower decline profile from 2027 onward. Incorporating lower output in 2025–26, we now estimate YE25 net debt of ~US$165 mm, versus ~US$105 mm previously. Our dividend forecast remains unchanged at ~US$85 mm in 2026, supporting a projected YE26 net cash position above US$215 mm. The operational issues at Triton underscores the strategic importance of Serica’s M&A efforts to diversify its asset base and reduce single-asset exposure. Reflecting updated production and financial assumptions, we revise our target price to £3.05 per share, in line with our updated ReNAV
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Valeura Energy (VLE CN)C; Target price of C$12.70 per share: Potential reserves addition. Wassana redevelopment on track – 3Q25 production averaged ~23 mbbl/d (above 2Q25 production of 21.4 mbbl/d), exiting the quarter at 24.8 mbbl/d. Ten wells were drilled at Nong Yao, of which seven are now producing. Field output has increased from ~8 mbbl/d to ~11.6 mbbl/d as of end-September. Several wells indicate potential reserves upside. At Nong Yao A, the lateral extent of the H2.0 sand encountered in well NYA-40H exceeded expectations. Additional bypassed oil was identified in the shallower H2.5 and H3.0 zones. At Nong Yao B, appraisal well NYB-29 confirmed development potential in both the H8.0 and H8.5 sand reservoirs. These intervals will be evaluated for inclusion in future drilling campaigns. At Nong Yao C, well NYC-11H exceeded management’s expectations, encountering net oil pay throughout virtually all of its horizontal section. FY25 production is now expected at the lower end of guidance of 23–25.5 mbbl/d. The shares continue to offer deep value. Our net cash forecast exceeds the current market capitalization by early 2028. Recent drilling success at Bussabong (Block G3/65) suggests increasing resource potential, with Valeura holding a 40% WI post-acquisition. The processing of newly acquired 3D seismic may further enhance the prospectivity of G1/65 and G3/65. FID could be taken in 2026. The redevelopment of Wassana continues to be expected to reach first oil in 2Q27.
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Zephyr Energy (ZPHR LN)C; Target price of £0.16 per share: ~35 mmboe net 2P reserves in the Paradox – From exploration to value and growth – Zephyr is estimated to hold 35.2 mmboe net 2P reserves (net of royalty) and 74.2 mmboe 3P plus contingent resources in the Paradox. The 2P case assumes 12 drilling locations, including 3 existing wells. These volumes are materially higher than in the 2022 CPR (25x for 2P) and align with the May management estimates (25.6–89.5 mmboe vs. 35.2–74.2 mmboe in the new CPR’s 2P–3P+2C range). The 3P+2C case includes 11 additional locations (further from the existing wells) vs. the 2P case. The CPR assigns a ~US$101 mm NPV10 to the 2P case. Upside remains: it assumes flat pricing of ~US$62.5/bbl WTI and ~US$3.5/mcf HH, vs. our US$67/bbl and US$4.5/mcf. West Coast gas sales could boost realizations. The CPR also uses a US$9/bbl condensate transport cost—nearly 2x the historical US$4–5/bbl which we expect to revert to more historical norms. The CPR’s type curves assume ~10,000 ft laterals; extending to 15,000 ft could unlock further volumes. Organic production ramp-up is relatively slow as it is limited by balance sheet constraints (2P plateau of ~40 mmcf/d). Despite >2x the resources, the 3P+2C case adds only 58% to the CPR NPV10 due to the long ramp-up. A funding partner could accelerate growth, which would in turn provide enhanced NPVs. The CPR estimates substantial undiscounted free cash flows of US$400–880 mm across the 2P and 3P+2C cases. This could be just a starting point. The CPR volumes cover only the Cane Creek reservoir across 20,000 acres in the WSU (covered by 3D seismic). Zephyr also holds 26,000 adjacent acres not yet included. Zephyr has already nominated further acreage. Additionally, there are 270 mmboe 2U prospective resources in the upper sands. Following updates to our production and cost assumptions, we have raised our target price from £0.15/sh to £0.16/sh. With the Paradox now materially derisked, Zephyr has transitioned from an exploration-led story to a value play with embedded growth and exploration upside.
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IN OTHER NEWS
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AMERICAS

Alvopetro Energy (ALV CN): Operating update in Brazil and Canada - September sales volumes were 2,231 boe/d including 2,069 boe/d in Brazil. The company is divesting its interests in the Bom Lugar and Mãe da Lua oil fields in Brazil for a total consideration of up to US$0.6 mm. In Canada, Alvopetro has agreed to fund 100% of the drilling of two earning wells to earn a 50% working interest in an additional 46.9 sections of land (15,010 net acres) at Mannville Stack.

Helium Evolution (HEVI CN): Helium production start in Canada – Helium production has started at the Soda Lake facility. The plant has a capacity of 12 mmcf/d of raw gas. Helium concentration is ~1%.

EUROPE

Aker BP (XOM US): 3Q25 update in Norway – 3Q25 production was 414 mboe/d.

Beacon Energy (BCE LN): Entry in Italy – Beacon is acquiring 48% interest in LNEnergy from Reabold (RBD LN). Beacon will initially acquire 24% of the company and will acquire the balance upon the award of a Production Concession in Italy, expected mid-2026,. On second completion, Beacon will be the largest shareholder of LNEnergy. LNEnergy holds the Colle Santo project, onshore Italy with 65 bcf of 2P reserves. FID is expected in mid 2026 with first gas in 2H27. Beacon is raising £3.5 mm of new equity to finance the Colle Santo project through FID. Reabold will participate in the placing (£0.75 mm). On completion of the placing and the acquisition, Reabold will hold 29% of Beacon. In addition, Reabold will receive contingent consideration representing 11.55% of annual post-tax, post-financing cash flow of LNEnergy, subject to a cap of EUR16.17 mm.

BlueNord (BNOR NO): Production update in Denmark – September production was 41.2 mboe/d net to BlueNord. The Tyra hub produced 22 mboe/d net (18.9 mboe/d over 3Q25 at the top of the 17-19 mboe/d guidance) while the base assets produced 19.2 mboe/d (20.2 mboe/d over 3Q25, which is below the 21-23 mboe/d guidance).

OMV (OMV AG): Capital Market Day – Production is expected to be ~400 mboe/d by 2030. The company is now considering acquisitions to boost growth. Organic investments will be ~EUR2.8 bn per year over 2026-2030 with 30% allocated to sustainable projects. 3Q25 production was 304 mboe/d.

Repsol (REP SM): 3Q25 update – 3Q25 production was 551 mboe/d.

Shell (SHEL LN): 3Q25 update – 3Q25 production is expected to be 3.70-3.84 mmboe/d.

Tenaz Energy (TNZ CN): Acquisition of North Sea assets – Tenaz is acquiring 3.2 mboe/d production and 19.3 mmboe of 2P reserves in Germany and the Netherlands for US$244 mm comprised of US$232 mm in cash and US$12 mm in Tenaz shares with contingent consideration of up to US$60 mm based on the success of future exploration prospects. Net production is expected to increase to 7 mboe/d in 2026. The asset package includes 27% WI in N4/N5/N, 22.5% WI in N72c, 45% in 4Quads, 27% in H&L and 45% in Geldsackplate. In addition to the producing fields, there are four fields with discovered gas with 103 bcf 2C resources, and 14 exploration prospects with 410 bcf U2 prospective resources.

TotalEnergies (TTE FP): Divesting interests in Norway field - ORLEN is acquiring 20.23% interest in the Tommeliten Gamma field (reserves of 6 mmboe) from Total.

UK Oil & Gas (UKOG LN): Rasing further equity for H2 project in the UK – The company has raised a further £1 mm of new equity at a price of 0.03 pence per share. The proceeds will be used to progress the planned collaboration with National Gas.

Var Energi (VAR NO): 3Q25 trading update and reserve increase in Norway – 3Q25 production was 370 mboe/d. Remaining recoverable volumes at the Gjøa field increased by a total of 6.3 mmboe (+25%). Vår Energi expects to reach around the mid-point of the production guidance of 330-360 mboe/d for FY25. 4Q25 production is expected to be around 430 mboe/d.

FORMER SOVIET UNION

Enwell Energy (ENW LN): Operating update in Ukraine – Production from the MEX, SV and VAS licences remain suspended. The company held US$100 mm in cash at the end of September including US$84 mm equivalent in Ukrainian Hryvnia.

MIDDLE EAST AND NORTH AFRICA

Shell (SHEL LN): Selling interest in exploration licence in Egypt – QatarEnergy is acquiring a 27% interest in the North Cleopatra offshore block.

SUB-SAHARAN AFRICA

Aminex (AEX LN): Raising new equity for Tanzania – Aminex has raised ~£2.92 mm of new equity priced at 1.65 p per share. The proceeds will fund the forecasted running costs until receipt of revenues from Ntorya, in place of continuing to draw down the remaining amount from the funding facility the company currently has with its largest shareholder.

PetroNor (PNOR NO): Production update in Congo – 3Q25 production was 4,112 bbl/d. YE25 production is expected to be >5 mboe/d.

EVENTS TO WATCH NEXT WEEK