AUCTUS ON FRIDAY - 14/03/2025

AUCTUS PUBLICATIONS
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Arrow Exploration (AXL LN/CN)C; Target price of £0.80 per share: Reserves increase showcases FY24 drilling success – YE24 2P and 3P reserves are estimated at 13.6 mmboe and 22.3 mmboe, respectively. This represents an increase of 15% and 25%, respectively vs. YE23. Adding back FY24 production of 1.3 mmboe, the 2024 activity program has added approximately 2.8 mmboe of 2P reserves and 5.3 mmboe of 3P reserves at Tapir (overall increase including all the company’s assets: +3.0 mmboe of 2P reserves and +5.7 mmboe of 3P reserves). The 2P reserves addition during 2024 is in line with our forecasts (+3.4 mmboe). The YE24 reserves estimate includes only a very small contribution from the Alberta Llanos discovery given that only one well had been drilled at YE24. In addition only the Ubaque had been tested by then while oil had also been discovered in other horizons (C7 and Guadalupe). Three wells are now in production. We currently assume 1.8 mmbbl WI resources at Alberta Llanos. This discovery could be developed with approximately six horizontal wells spaced 300 feet apart, starting later in 2025. The reserves estimate also does not include any contribution from the CN HZ-9 well drilled in 1Q25 and currently cleaning-up.
See website for full report

Condor Energies (CDR CN)C; Target price of C$5.60 per share: Adding a critical minerals licence in Kazakhstan – Condor has been awarded a second critical minerals mining license in Kazakhstan, holding a 100% WI in the 6,800-hectare Kolkuduk License. This license grants exploration rights for mining solid minerals over a six-year term. Located near the existing 37,300-hectare Sayakbay critical minerals license, both sites are positioned in a heavily faulted, geothermally active region, facilitating the migration of mineralized brines into reservoirs. The licenses are also adjacent to other emerging hard rock mining operations focused on critical minerals. Previous drilling in the Kolkuduk License territory tested brine deposits with lithium concentrations of up to 130 milligrams per liter. Historical wireline log and core data have identified a 1,000-meter column of both tested and untested brine reservoirs. Other critical minerals found in the area include rubidium, strontium, and cesium.

Valeura Energy (VLE CN)C; Target price of C$13.00: Investor visit: adding depth and breadth – Valeura hosted an investor trip to its operations in Thailand earlier this month. The visit underscored three key aspects: (1) the extensive experience of the management team, (2) the strong relationships with Thai authorities, and (3) the substantial breadth of its assets, offering more potential than previously anticipated. With its production representing ~30% of Thailand's total crude oil production of 81 mbbl/d (2024), Valeura is one of the largest oil producers in the country and a very important partner of PTTEP, which is more focused on natural gas production. Recent well performance, utilizing enhanced seismic modeling, downhole water management technology, and precision geosteering, suggest that a recovery factor of up to 60% could be achieved. This could lead to further increases in reserves. FID for the Wassana redevelopment is still anticipated in early 2Q25, with first oil expected in early-2027. This involves a new oil production platform with a capacity of 10 mbbl/d (vs. Wassana's FY24 production of ~3.6 mbbl/d). A significant portion of the 10.6 mmbbl low-risk contingent resources at Wassana will be converted into 2P reserves upon FID. The new platform would also enable two further satellite developments to the north and south. This would derisk additional contingent resources and provide further exploration upside. While the overall prospective resources have not been disclosed, the company has identified prospects and leads on all its licences. There are ongoing or planned seismic acquisition and processing activities at Jasmine and Manora to further grow the portfolio. The Ratree prospect (Jasmine area), with prospective resources of 3.4-41.9 mmbbl (19.4 mmbbl mid case), is expected to be drilled around mid-2025. Valeura expects to maintain production of 20-25 mbbl/d until 2039, which represents a significant upside compared to the independent auditor's 2P profile of 15 mbbl/d in 2030 and cessation of production at YE36.
See website for full report

Zephyr Energy (ZPHR LN)C; Target price of £0.13: Key Paradox well test results expected in April – FY24 sales volumes averaged 1,149 boe/d including 139 bbl/d of NGL. The NGL sales were higher than we were anticipating (~100 bbl/d) but FY24 production of 1,052 boe/d was impacted by downtime experienced in the Williston Basin in 4Q24 due to extreme weather in the area. 4Q24 net production was 829 boe/d (plus NGL that we estimate at 90-100 bbl/d). In the Paradox basin, 97% of the lateral in the State 36-2 LNW-CC-R well was drilled in the Cane Creek reservoir with elevated mud gas levels. Zephyr plans to perforate 16 stages with completion operations due to commence next week. The initial production test results are expected to be available in mid to late April. The results of this well test are very important as they would unlock Zephyr’s assets in the Paradox. Our unrisked NAV for the ~40 mmboe 2P reserves + 2C resources in the Cane Creek reservoir is £0.15 per share. There are eight overlaying reservoirs above the Cane Creek with 270 mmboe prospective resources. We forecast first production from the Cane Creek in 4Q25.
See website for full report

IN OTHER NEWS
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AMERICAS

Frontera Energy (DEC CN): 4Q24 results and Reserves update. Guyana licence cancelled – 4Q24 production in Colombia and Ecuador totaled 42,406 bbl/d. YE24 2P reserves in Colombia and Ecuador were estimated at 151.3 mmboe (YE23 2P reserves: 164.1 mmboe). YTD25 production is ~40.4 mbbl/d. The decline from 4Q24 is attributed to unexpected well failures late in 2024. These issues are being addressed, and the company remains confident in meeting FY25 production guidance. At YE24, net debt stood at US$277.3 mm. Additionally, the government of Guyana has cancelled the prospecting license for the Corentyne block.

Helix Exploration (HEX LN): Operational update in the USA - The acidization of the Charles Formation at the Clink #1 well has not resulted in commercial flow rates. Drilling at Rudyard is slated to commence in April. The company is acquiring the Weil #1 well along with the surrounding 640-acre lease in Section 28 for ~US$0.3 mmin cash. Weil #1 is anticipated to double the company’s current production capacity at Rudyard.

Helium Evolution (HEVI CN): Strategic investment from ENEOS Group – Helium Evolution is issuing C$2.7 mm of new equity to ENEOS Group at a price of C$0.17 per share. ENEOS Group will also receive half a warrant for each new share, with an exercise price of C$0.27 per share. ENEOS Group is Japan’s largest energy, resources, and materials conglomerate.

ASIA AND AUSTRALASIA

Conrad Asia Energy (CRD AU)/Empyrean Energy (EME LN): New Gas Sales Arrangements in Indonesia – Indonesian authorities have mandated that all Mako gas be allocated to the domestic market in Batam, with PT PLN as the purchaser. Previously, the gas was to be sold to PGN and Sembcorp, but the gas sales agreement with these companies will be terminated.

Sinopec: Reserves increase in China – Sinopec has added 1.3 bn bbl of oil reserves at two shale plays in the Xinxing field in the Bohai Bay basin and the Qintong field in the Subei basin.

EUROPE

BlueNord (BNOR NO): Reducing 1Q25 production guidance in Denmark – Due to a breaker failure in the high-voltage electrical system, parts of the power supply for Tyra have been temporarily cut. Full operational capacity is anticipated to be restored within the next four weeks. The Tyra hub, which produced 15.1 mboe/d in February, is now expected to produce 8–10 mboe/d during 1Q25, down from the previous guidance of 17–20 mboe/d.

Equinor (EQNR NO)/OKEA Energy (OKEA NO): Discovery in Norway – 19-44 mmboe have been encountered at the Mistral exploration well.

Tenaz Energy (TNZ CN): 4Q24 results – 4Q24 production in Canada was 2,814 boe/d. Tenaz expects to complete the acquisition of NOBV in the Netherlands by mid-2025. YE24 2P reserves in Canada were estimated at 16.6 mmboe (+14% vs YE23).

FORMER SOVIET UNION

Petro Matad (MATD LN): Operating update Mongolia – The Heron 1 well continues to produce steadily at ~200 bbl/d. The company is looking for a partner for Block XX. Discussions with three entities are ongoing.

MIDDLE EAST AND NORTH AFRICA

Genel Energy (GENL LN): Entering Oman onshore – Genel has entered into a Block 54 Exploration and Production Sharing Agreement, securing a 40% participating interest. The remaining 60% interest and operatorship will be held by OQ Exploration & Production. Block 54 is situated on the eastern side of the South Oman Salt Basin, adjacent to existing production, covering an area of 5,632 km² within the Al Wusta Governorate, ~600 km south of Muscat. The area is largely underexplored. Over the next three years, the partners plan to invest approximately US$25 mm during the initial three-year phase, focusing on testing accessible existing wells, drilling, and 3D seismic acquisition. Genel will partially carry OQEP’s 60% participating interest during this initial phase.

ShaMaran Petroleum (SNM CN): 4Q24 results and reserves update in Kurdistan – 4Q24 gross production from Atrush and Sarsang was 66,400 bbl/d. At March 12, 2025, net debt was US$121.4 mm. YE24 WI 2P reserves were estimated at 72 mmbbl.

EVENTS TO WATCH NEXT WEEK
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17/03/2025 – Criterium Energy (CEQ CN): Reserves update
17/03/2025 - Diversified Energy (DEC LN/US): 4Q24 results
20/03/2025 – Condor Energies (CDR CN): 4Q24 results
20/03/2025 – Energean (ENOG LN): 4Q24 results
20/03/2025 – Gulf Keystone Petroleum (GKP LN): 4Q24 results
20/03/2025 – PetroTal (PTAL LN/TAL CN): 4Q24 results