Auctus on Friday - 28/07/2023
AUCTUS PUBLICATIONS________________________________________
Arrow Exploration (AXL LN/CN)C; target price of £0.50 per share: CN-2 flows at up to 1 mbbl/d. Focusing on developping the Ubaque at Carrizales Norte - The Carrizales Norte-2 well (CN-2) encountered 60’ of net pay in the Ubaque formation. The well has been put on production in the Ubaque with initial flow rates of 1,012 barrels of fluid per day. The water cut stabilized at 3% and the oil gravity is 13.6 API. The CN-2 well is currently producing 680 bbl/d gross (340 bbl/d net) as the company has set the ESP at the minimum optimum rate to maximize recovery factor. The build-up analysis indicates the well can produce at 1,400 bbl/d gross at a consistent producible rate. The net pay encountered in the Ubaque at CN-2, the oil quality and the achieved flow rate are consistent with the Ubaque at CN-1. The water cut is however much lower at CN-2 than at CN-1 (3% vs ~28%); which is a positive. The C7 sands were also tested but there was an immediate water breakthrough (the water cut reached 50%) that would require large water handling facilities. It is not clear where the water came from as the perforation were 15’ higher than at CN-1. It could be associated with a cementing issue. Over 30’ of pay was encountered at the Gacheta. That formation was not tested as it would have a required different completion equipment.
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SDX Energy (SDX LN)C: Convertible loan funding – SDX is raising a convertible for up to US$3.25 mm of which an initial amount of US$2 mm has been drawn and will be used to reduce outstanding debt to the European Bank for Reconstruction and Development and pay critical service providers to accelerate the Moroccan drilling campaign. The conversion price is approximately 4.5 pence per share. If conversion occurs within ten business days of maturity, the conversion price is approximately 6.6 pence per share. The convertible carries an annual Interest of SOFR+15%.
IN OTHER NEWS
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ASIA PACIFIC
Eni (ENI IM): Acquiring asset in Indonesia – Eni is acquiring Chevron’s interests in Ganal (62%), Rapak (62%) and Makassar Straits (72%).
Shell (SHEL LN): Selling asset in Indonesia – Shell is selling its 35% WI in the Masela PSC to Pertamina and Petronas for US$325 mm base consideration plus a US$325 mm contingent consideration on FID for the Abadi gas project.
EUROPE
Deltic Energy (DELT LN): UK licences update – Capricorn Energy is withdrawing from its licences in the Southern North Sea. Deltic also decided to withdraw from licences P2560, P2561 and P2562. Deltic will however continue with Licences P2567 (Cadence) and P2428 (Cupertino), where 17 leads and prospects in the Carboniferous with combined, gross P50 gas-initially-in-place of more than 2.6 tcf have been matured,
Equinor (EQNR NO): 2Q23 results/extraordinary dividend – Adjusted net earnings for the period were US$2.25 bn with 1,994 mboe/d production. The company has declared an extraordinary dividend of U$0.60 per share and is launching a third tranche of a share buyback of US$1.67 bn.
Eni (ENI IM): 2Q23 results – 2Q23 adjusted net earnings were Eur1.9 bn with 1,611 mboe/d production. The company has re-iterated its FY23 production guidance of 1.63-1.67 mmboe/d. The FY23 capex guidance has been reduced from EUR9.0 bn, down from EUR9.2 bn.
OMV (OMV AG): 2Q23 results and discovery in Austria – Adjusted net income for the period was EUR472 mm with 353 mboe/d production. FY23 production is expected to be ~360 mboe/d. The Wittau Tief-2a exploration well is expected to have encountered ~28 mmboe of gas recoverable resources.
Repsol (REP SM): 2Q23 results – 2Q23 adjusted earnings were EUR0.8 bn with 596 mboe/d production.
Shell (SHEL LN): 2Q23 results – Adjusted net earnings were US$5.07 bn over the period with 2,947 mboe/d production.
TotalEnergies (TTE FP): Acquiring 100% of Total Eren – Total is acquiring the 70% in Total Eren it does not own for EUR1.5 bn.
TotalEnergies (TTE FP): 2Q23 results – Adjusted net income for the period was US$5.0 bn with 2.57 mmboe/d production. Total will distribute a second interim dividend of EUR0.74 per share and launch a US$2 bn share buyback programme in 3Q23. 3Q23 production is expected to be ~2.5 mmboe/d. FY23 capex continues to be budgeted at US$16-18 bn.
Var Energi (VAR NO): 2Q23 results – 2Q23 production in Norway was 202 mboe/d. The company has re-iterated its FY23 production and capex guidance. Var will distribute US$270 mm in dividend for each of 2Q23 and 3Q23.
Wintershall Dea: 2Q23 results – 2Q23 production was 322 mboe/d. The company has re-iterated its FY23 production guidance of 325-340 mboe/d with lower capex of EUR1.0-12. bn. Net debt at the end of June was EUR2.5 bn.
FORMER SOVIET UNION
Enwell Energy (ENW LN): Operating update in Ukraine – 2Q23 production was 2,659 boe/d. The company held US$33.8 mm in cash at the end of June and US$67 mm currently. Enwell has also paid a dividend of £0.15 per share. A 5 year suspension order has been issued for the VAS production licence and the SC exploration licence.
Nostrum Oil & Gas (NOG LN): 1H23 update in Kazakhstan – 1H23 production was 10,048 boe/d. Third-party feed stock from Urals Oil & Gas is estimated to be received f or treatment in Nostrum’s facilities in Q423.
MIDDLE-EAST AND NORTH AFRICA
Forza Petroleum (SNM CN): Operating update in Kurdistan – 2Q23 production was 605 bbl/d. The company’s work programme continues to be suspended pending the reopening of the export pipeline. Forza held US$71.2 mm in cash as at the end of June. A US$76.2 mm in deferred purchase consideration is payable in connection with the acquisition of the Hawler licence.
SUB-SAHARAN AFRICA
BW Energy (BWE NO): 2Q23 update – Gross production at Tortue was 15.2 mbbl/d. Net debt at the end of June was US$67 mm.
Seplat Energy (SEPL LN): 1H23 results – 1H23 production in Nigeria was 50,805 boe/d with oil production uptime of 80%. The FY23 production guidance remains 45-55 mboe/d with higher capex of US$160-190 mm (US$160 mm previously). A quarterly dividend of US$0.03 per share has been declared (US$0.12 per share annual run rate). Net debt at the end of June stood at US$380 mm.
EVENTS TO WATCH NEXT WEEK
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01/08/2023: BP (BP LN) – 2Q23 results
01/08/2023: Gran Tierra Energy (GTE CN/US/LN) – 2Q23 results
02/08/2023: Parex Resources (PXT CN) – 2Q23 results
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.
BW Energy Ltd. BW Energy Limited is a Bermuda-based oil and gas company engaged in oil and gas exploration and production activities. The Company is involved in the acquisition, development and production of oil and natural gas fields. It has a diversified portfolio of production and development assets offshore West Africa and Brazil, and holds interests in three hydrocarbon licenses in Gabon, Brazil and Namibia. Its Dussafu Marin Permit and the associated Ruche Exclusive Exploitation Area (EEA) production license are located approximately 50 kilometers (km) off the coast of Gabon. The Ruche EEA covers an area of approximately 850 square kilometers. The Maromba discovery is located approximately 100 kilometers offshore in the southern part of the Campos Basin. The Kudu gas field is some 130 km offshore and covers an area approximately 4,500 square kilometers. The Company's subsidiaries include BW Energy Dussafu B.V., BW Energy Gabon Pte Ltd, BW Energy Gabon SA and BW Energy Holdings Pte Ltd.
Cluff Natural Resources invests in global resources opportunities with a primary focus on U.K. based upstream energy projects. Co.'s principal activity is the exploration, evaluation and development of mineral exploration targets. As of Dec 31 2016, Co. held a 100% interest in two gas licenses in the Southern North Sea.
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.
Equinor is engaged in oil and gas exploration and production activities. Co. is primarily focused on exploration, development and production of oil and gas on the Norwegian continental shelf (NCS). Co.'s operations are organized into four segments. The Development and Production Norway and Development and Production International segments explore, develop, produce and extract crude oil, natural gas and natural gas liquids. The Marketing, Processing and Renewable Energy segment markets, trades, transports and processes oil and natural gas and renewable energy. The Other segment consists of global well and project delivery, research and develpoment, and business development.
Nostrum Oil & Gas is an independent oil and gas company, engaged in the production, development and exploration of oil and gas. Co. operates three exploration concessions and are primarily conducted through its oil and gas producing subsidiary Zhaikmunai LLP located in Kazakhstan. Zhaikmunai LLP carries out its activities in accordance with the Contract for Additional Exploration, Production and Production-Sharing of Crude Hydrocarbons in the Chinarevskoye oil and gas condensate field for the exploration and production of hydrocarbons in Chinarevskoye oil and gas condensate field.
OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
SDX Energy is engaged in the exploration, acquisition, development and production of oil and natural gas in Africa and Egypt. As of Dec 31 2010, total gross proved reserves for light and medium oil consisted of 3,593 thousand barrels ("mbbls"), natural gas liquids consisting of 211 mbbls and natural gas consisting of 2,575 million cubic feet.
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.
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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