AUCTUS ON FRIDAY - 03/10/2025
AUCTUS PUBLICATIONS________________________________________
Arrow Exploration (AXL LN/CN)C; Target price of £0.40 per share: Dry hole at Mateguafa Oeste but three more prospects to drill – The Mateguafa Oeste was water wet. Our ReNAV for the well was £0.09 per share. We did not carry any production from this prospect in our cash flow forecast. The rig will now move to Mateguafa Attic where the Mateguafa 5 vertical well will be drilled in November. This is a low risk well that is a step out to Mateguafa 1 and Mateguafa 3, which together historically produced 0.6 mmbbl of oil out of the Carbonera zone, C7. This target is geologically independent from the Mateguafa Oeste prospect. The well will be targeting both the C7 and Ubaque reservoirs. Our unrisked NAV for the well is £0.08 per share. On the basis of a successful well at Mateguafa 5, Arrow plans to drill three additional wells, one vertical and two horizonal, on the prospect. Arrow then plans to test the Icaco, Macoya and the Capullo prospects. Drilling could start in 1Q26. Our total unrisked NAV for the three wells is £0.31 per share. As we reflect the drilling result at Mateguafa Oeste on our valuation, we have changed our target price to £0.40 per share.
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Corcel (CRCL LN)C; Target price of 1.50 p per share: Enacting warrant acceleration – Corcel has triggered the acceleration clause on the 1.7 bn warrants originally issued in February. The strike price is £0.00225 per share. If fully exercised, this will generate net proceeds of ~£3.75 mm.
Pulsar Helium (PLSR LN/CN)C; Target price of £0.80 per share: Stable high concentration of helium at Topaz.
Pre-feasibility study in Greenland – Laboratory analysis has validated a consistent helium content of 7–8% at Jetstream #1 over extended flow periods of 12–18 h. Initial gas samples from Jetstream #2 indicate similar helium concentrations. Jetstream #1 achieved significantly higher gross gas flow rates during the recent test relative to the 2024 campaign. However, the average helium concentration of 7–8% is comparable with the 2024 test range (7.9%–14.5%, with an average of 9.9%). This is important as these results suggest that the deeper zones contribute gas with comparable helium concentration. Notably, the 2024 Competent Person Report classified helium in the deeper zones as prospective resources, while helium in the shallower intervals was categorized as contingent. CO₂ concentrations measured during the recent test (75–80%) are consistent with prior results (62–74%). Assuming a raw gas flow rate of 0.5 mmcf/d per well and a helium concentration of 7.5%, annualized helium revenues are estimated at ~US$7 mm per well (based on US$500/mcf pricing). This compares favorably with individual well costs of under US$2 mm. Results from recent flow testing will be used to establish well productivity profiles and inform economic modelling at the individual well level. The company is concurrently sizing the surface processing infrastructure required to extract helium and CO₂. This will form the basis of the broader field development plan. Notably, the raw gas stream contains negligible methane, which may allow for a more streamlined and cost-efficient processing solution. Reflecting a revised helium concentration assumption of 7.5% (we previously assumed ~12%) and a first gas timeline of 2027 (versus late 2026), we have changed our target price to £0.80 per share.
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Serica Energy (SQZ LN)C; Target price of £3.15 per share: Depth, breadth, and a cash windfall – Serica is acquiring Prax Upstream from administrators for ~US$26 mm, adding 8–10 mboe/d net production in 2026 and 11 mmboe of 2P reserves, diversifying exposure to a key growth basin. Prax holds a 100% WI in Lancaster with 2.6 mmbbl 2P oil reserves, 3-4 mbbl/d production forecast in 2026 (given COP in 3Q26). Prax has also executed two SPAs (closing in 1Q26). Serica will acquire from TotalEnergies a 40% WI in the Greater Laggan Area (GLA), a gas producing hub (4.6 mmboe 2P reserves and 5.4 mmboe 2C resources, 5 mboe/d in 1H25) in the West of Shetland. The second SPA covers ONE-Dyas’ 10% WI in Catcher and 5.21% in the Golden Eagle Area (GEAD), contributing 2.9 mboe/d of production in 1H25, with 3.7 mmboe of 2P reserves (mostly crude). The transaction is immediately cash accretive. Net of the ~US$26 mm consideration, we estimate that the deal could boost Serica’s YE26 net cash by ~US$200 mm, including US$100 mm on completion of the various transactions (interim free cash flow since effective dates), US$50 mm incremental FY26 free cash flow from the acquired assets and the balance from using Prax’ US$0.3 bn EPL tax losses. The ~US$200 mm net cash uplift by YE26 alone more than offsets the c.$150 mm decommissioning costs related to Lancaster, Catcher and GEAD. The remainder of the decommissioning is estimated at US$200-250 mm post tax at GLA, and it is only due well into the 2030s, with plenty of opportunity for this to be pushed out. We have increased our target price from £2.70/sh to to £3.15/sh in line with our new ReNAV.
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Zephyr Energy (ZPHR LN)C; Target price of £0.15 per share: All eyes on upcoming CPR for the Paradox – 2Q25 sales (excluding NGLs) averaged 632 boe/d, reflecting continued operator-imposed constraints on the six Slawson wells due to prevailing low commodity prices. Aggregate production from these wells in 1H25 was 141 boe/d, below management’s forecast of 214 boe/d. Importantly, there are no reservoir integrity concerns. With the recent completion of a production acquisition which has added approximately 380 moe/d from June, and the potential for the Slawson wells to come back online, we believe production in 2H25 will be significantly improved. We identify two near-term catalysts that could drive a share price re-rating. First, Zephyr is expected to publish a Competent Person’s Report (CPR) for the Paradox project imminently. This report is anticipated to include a material resource upgrade and greater clarity on the forward development plan. Second, we expect imminent approval by Zephyr’s funding partner for several drilling opportunities across the non-operated Rockies portfolio. Up to 18 locations are under consideration, with funding potentially sourced from Zephyr’s US$100 mm strategic partnership facility.
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IN OTHER NEWS
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AMERICAS
Parex Resources (PXT CN): Operating update in Colombia – 3Q25 production in Colombia was 44,000 boe/d, increasing to ~46,500 boe/d currently.
Touchstone Exploration (TXP LN/CN): Operating update in Trinidad – The Cascadura-4ST2X, well encountered gas-charged sands in the lower portion of the well and circulation was lost, leading the company to conclude drilling operations earlier than planned. The drill string is stuck and Touchstone has elected to complete the well for production using a combination of casing and the drill string, enabling access to the gas-charged intervals identified while drilling. Production in August was 5,152 bbl/d
ASIA AND AUSTRALASIA
Jadestone Energy (JSE LN): 1H25 results – YTD production has averaged ~20,300 boe/d. FY25 production continues to be expected to average 19,500-21,500 boe/d with capital expenditure of US$105-115 mm. Net debt at 31 August 2025 was US$53.5 mm.
EUROPE
ExxonMobil (XOM US): Prospective resources in Cyprus – The Glaucus and Pegasus gas discoveries offshore Cyprus could hold between 8 tcf and 9 tcf of gas.
TotalEnergies (TTE FP): Strategy update – Total has reduced its net Capex guidance to ~US$16 bn in 2026 and to US$15-17 bn per year over the 2027-2030 period, down US$1 bn per year compared to the previous guidance. Total plans for +3% per year oil and gas production growth between 2024 and 2030.
UK Oil & Gas (UKOG LN): Raising equity for clean energy project in the UK – The company has raised £3 mm of new equity priced at £0.03 per share to (1) a potential combined electrolytic hydrogen generation and local scale salt-cavern hydrogen storage scheme in central eastern Dorset and (2) to fund the necessary engineering concept and design studies for the collaboration with National Gas.
Var Energi (VAR NO): Acquiring asset in Norway – Vår has acquired TotalEnergies’ ~39% ownership interest in the Ekofisk PPF development project in licence PL018F. The project consists of four new subsea templates and 11 production wells tied back to the Ekofisk Field Center. The transaction will increase Vår Energi’s ownership interest in the project from 12.388% to 52.284%.
FORMER SOVIET UNION
Enwell Energy (ENW LN): 1H25 results – 1H25 production in Ukraine was 1,865 boe/d. Net cash at the end of June was US$100.7 mm. Further work on the MEX-GOL, SV and VAS licences will remain suspended until there is a resolution of the regulatory issues, including the lifting of the suspension orders.
Petro Matad (MATD LN): Operating update in Mongolia – The Heron-1 well continues to produce with artificial lift at a rate of c. 150 bbl/d with water cut stable at ~ 3%. The company held US$2.37 mm in cash at the end of June.
SUB-SAHARAN AFRICA
Rhino Resources/bp (BP LN)/Eni (ENI IM): Discovery in Namibia – The Volans-1X exploration well encountered 26 m of net pay in rich-gas condensate bearing reservoirs, with the reservoir showing excellent quality petrophysical properties and no observed water contact.
Tullow Oil (TLW LN): Reserves update – WI 2P reserves are estimated at 113.8 mmboe as at the end of June. Following the Memorandum of Understanding with the Government of Ghana to extend the production licences to 2040, thee reserves auditor has estimated that 14.7 mmboe of Jubilee Contingent Resources and 3.5 mmboe of TEN Contingent Resources would move to 2P Reserves once the extensions are executed.
EVENTS TO WATCH NEXT WEEK
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06/10/2025: OMV (OMV AG): Capital Market Day
06/10/2025: Repsol (REP SM): 2Q25 update
09/20/2025: OMV (OMV AG): 3Q25 update
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.
BP is an integrated oil and gas group based in the United Kingdom. Co. is engaged in the exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; and the manufacture and marketing of petrochemicals. Co. operates globally, with business activities in Europe, the U.S., Canada, Russia, South America, Australasia, Asia and parts of Africa. Co. operates in two business segments: Exploration and Production - including oil and natural gas exploration and development and production; and Refining and Marketing- activities include the refining, manufacturing, supply and trading, marketing and transportation of crude oil, petroleum and petrochemicals.
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.
Regal Petroleum is an independent oil and gas company focused on gas and condensate field development in Ukraine. Co. is engaged in the oil and gas exploration, development and production. Co. developed its Mekhediviska-Golotvshinska and Svyrydivske gas and condensate fields in north-eastern Ukraine, which were held under 100% owned and operated production licenses, as of Dec 31 2016. Co.'s subsidiary, LLC Prom-Enerho Produkt holds a production license over the Vasyschevskoye gas and condensate field, which also includes the Vvdenska prospect, located in the Dnieper-Donets basin in the north-east of Ukraine.
Exxon Mobil operates or markets products in United States and other countries through its divisions and affiliated companies. The company's business involves exploration for, and production of, crude oil and natural gas and manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and other products. In United States, the company's development activities are focused on the onshore United States, in the Permian Basin of West Texas and New Mexico and the Bakken oil play in North Dakota. Gas development activities are also focused on the Marcellus Shale of Pennsylvania and West Virginia, the Utica Shale of Ohio and the Haynesville Shale of East Texas and Louisiana.
Jadestone Energy is engaged in the evaluation, acquisition, exploration and development of oil and gas properties.
Parex Resources is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. As of Dec 31 2010, Co. had gross proved light and medium oil reserve of 1,066 thousand barrels (net: 980 thousand barrels).
Petro Matad's principal activity consists of oil exploration in Mongolia. Co. is focused on its exploration activities on its Production Sharing Contracts with the Mineral Resources and Petroleum Authority of Mongolia on Blocks IV, V and XX in Mongolia.
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.
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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