AUCTUS ON FRIDAY - 07/03/2025
GeoPark (GPRK US)C; Target price of US$17 per share: Four new exploration wells at Confluencia Sur – The FY24 production had been reported previously. Gross production in Argentina is approximately 15,000 boe/d and is expected to increase to around 16,000-17,000 boe/d by the end of 2025. The acquisition of the Argentinian assets is anticipated to be completed in late 1Q25 or early 2Q25 pending the regulatory approval of the Neuquen province. While the test results at the three wells drilled at Confluencia Norte in 2024 exceeded expectations, no reserves were booked for this area in 2024 since the licence is still in the exploration phase. The booking of reserves is expected to occur in 2026 as the company sanctions the development of the licence. During 2Q25, GeoPark is expected to start drilling four new exploration wells at Confluencia Sur. This could be very material as this block is estimated to hold 56 mmboe 3C contingent resources net to GeoPark. We reiterate our target price of US$17 per share. Our unrisked NAV for Confluncia Norte and Sur is ~US$17 per share.See website for full report
Panoro Energy (PEN NO)C; Target price of NOK47 per share: Discovery in Gabon – The Bourdon exploration well has encountered ~34 m of pay in the Gamba formation, making it the largest hydrocarbon column discovered to date in the Dussafu licence. The P50 WI prospective resources at Bourdon were estimated (pre-drill) at 5.1 mmbbl.
Vaalco Energy (EGY US/LN)C; Target price of US$10 per share: Adding exploration upside in Cote d’Ivoire – Vaalco has farmed into the CI-705 block offshore Côte d’Ivoire. Vaalco will become operator of the block with a 70% WI and a 100% paying interest though a commercial carry arrangement. The partners are Ivory Coast Exploration Oil & Gas (ICE) and PETROCI. Vaalco has invested US$3 mm to acquire its 70% WI in the block. The CI-705 block is located in the Tano basin and is ~70 km to the west of Vaalco’s CI-40 Block, where the Baobab and Kossipo oil fields are located, and 60 km west of ENI’s 2024 (1-1.5 bn boe light oil, gas and condensate) Calao discovery. Block CI-705 covers ~2,300 km2 with water depths ranging from zero to 2,500 m. ICE signed a PSC for the CI705 block in 2023, initially holding 90% WI. The exploration period spans seven years from 2023, with five years remaining. The block is covered by high-quality 2D and 3D seismic data, and ICE has identified a large gas-prone prospect in water less than 200 m deep. Only three wells have been drilled on the block, including the Barracuda-1 exploration well drilled by TotalEnergies in August 2021, which did not encounter hydrocarbons (Upper Cretaceous targets), leading the company to relinquish the block. ICE has previously indicated that their focus will be on the Albian sands. We do not anticipate much drilling activity on the block in the near term. However, this new asset increases Vaalco’s runway in Côte d'Ivoire. The size of the 2024 Calao discovery underscores the potential significance of offshore discoveries in Côte d'Ivoire. Note that the PSC covering the CI-705 block was awarded before this discovery was made.
See website for full report
Valeura Energy (VLE CN)C; Target price of C$13.00: Production boost and likely reserves increase at Manora – Valeura has drilled three new production wells and two appraisal wells at Manora. Four of these wells are now online, boosting production from 2,144 bbl/d to 2,866 bbl/d. The results of the A35 and A36 appraisal wells have derisked 3-5 potential future drilling targets. The associated resources were not included in the YE24 reserves estimates and are likely to be booked as reserves, extending the field's life. The A38 well was completed with an innovative downhole autonomous inflow control device to manage water vs. oil production. This device is expected to reduce operating expenses and decrease water management. Valeura plans to continue using this technology, which it has already been deploying in most of its new-drill horizontal wells for some time. The rig will now dill multiple wells at Jasmine before drilling the Ratree prospect (unrisked NAV of C$2.49 per share). The rig is currently not expected to return to Manora before 2026. While Manora represents only ~10% of Valeura's production, the results of the campaign showcase the company's business model, where low-cost drilling can rapidly add production and reserves, extend the production plateau, and delay decommissioning.
See website for full report
IN OTHER NEWS
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AMERICAS
New Stratus Energy (NSE CN): Acquisition in Ecuador. Equity financing – A consortium formed by Sinopec (60%) and New Stratus (40%) has been awarded a 20-year PSC for Block 60 in Ecuador (Sacha Block), for an upfront cash entry bonus of US$1.5 bn (US$600 mm payable by New Stratum). FY24 gross production for the Sacha Block was ~ 77,191 bbl/d of medium oil (25 degrees API gravity). The Sacha block is estimated to hold 67.8 mmbbl net to Stratum. At a WTI price of US$65/bbl, the government production share is anticipated to be 18%. In addition to the Entry Bonus, the Consortium has agreed to invest amounts in excess of US$1.7 bn to increase gross production to 105 mbbl/d by YE29. NSE’s portion of the entry bonus will be satisfied through a combination of a funding and off-take agreement in the amount of US$480 mm and a US$80 mm equity raise
Parex Resources (PXT CN): FY24 results and Reserves update in Colombia – The company expects to produce 43,000 to 47,000 boe/d in 2025. YE24 net cash was US$38 mm. Production in January and February averaged 44,500 boe/d with US$285-315 mm capex. YE24 2P reserves were estimated at ~170 mmboe (YE23: 169 mmboe).
Touchstone Exploration (TXP LN/CN): Reserves update in Trinidad – 4Q24 production was 5,287 boe/d. Relative to YE23 and after 2024 production, 2P reserves decreased by 26% to 50 mmboe at YE24. The reductions in reserves balances from 2023 reflects technical revisions to the natural gas reserves and NGL yields at Cascadura.
ASIA AND AUSTRALASIA
Reliance Energy/bp (BP LN): Receiving US$2.8 bn claim from India – Media reports highlighted that the companies have received a US$2.8 bn claim from India in relation to a gas migration dispute at KG-D6 in the Krishna Godavari basin.
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
DNO (DNO NO): Acquisition in Norway – DNO is acquiring Sval Energi from HitecVision for a cash consideration of US$450 mm based on an enterprise value of US$1.6 bn. Sval holds on-operated interest in 16 producing fields, with net production of 64,100 boe/d in 2024 and 141 mmboe in net 2P reserves and 102 mmboe of net 2C resources.
Equinor (EQNR NO)/OKEA Energy (OKEA NO): Discovery in Norway – 19-44 mmboe have been encountered at the Mistral exploration well.
Harbour Energy (HBR LN): 4Q24 results – FY24 production was 258 mboe/d. YE24 2P reserves and 2C resources were estimated at 3.2 bnboe (2023: 880 mmboe) including 2P reserves of 1.25 bnboe. YE24 net debt was US$4.7 bn. FY25 production is expected to be 450-475 mboe/d with US$24.-2.6 bn capex. Production from January to February 2025 averaged of ~500 mboe/d. In the 2025-2027 timeframe, Harbour expects production to average around 450 mboe/d with annual capital expenditure of less than US$2.0 bin in 2026 and 2027. The company expects to distribute an annual dividend of US$455 mm.
FORMER SOVIET UNION
Caspian Sunrise (CASP LN): Operating update Kazakhstan – FY24 production was 1,707 bbl/d with limited drilling activities.
SUB-SAHARAN AFRICA
Savannah Energy (SAVE LN): Operating update in Nigeria. Acquisition of South Sudan asset terminated. Raising new equity – FY24 gross production in Nigeria was 23.1 mboe/d. The potential drilling of two new wells on the Uquo field in 2H25 could add up to 80 mmcf/d of supplemental production capacity. The company could also drill a potential exploration well targeting unrisked gross gas initially in place of 154 bcf. The acquisition of Sinopec Nigeria is expected to complete in March. YE24 net debt was US$666.5 mm. The acquisition of the ex-PETRONAS assets in South Sudan has been terminated. The company has raised £30.6 mm of new equity at a price of 7p per share.
Seplat Energy (SEPL LN): FY24 results – FY24 WI production in Nigeria was 48.6 mboe/d. The company’s YE24 2P reserves plus 2C increases resources were estimated at 1,217 mmboe (YE23: 540 mmboe) including 2P reserves of 886 mmboe (YE23: 478 mmboe). YE24 net debt was US$898 mm. WI production since the completion of the acquisition of ExxonMobil’s onshore assets in Nigeria was 81.1 mboe/d. Seplat has declared a quarterly dividend of 3.6 cts per share. In addition, the company is recommending a special dividend of 3.3 cts per share. FY25 production is expected to be 120-140 mboe/d with US$260-320 mm capex.
EVENTS TO WATCH NEXT WEEK
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10/03/2025 – Frontera Energy (FEC CN): 4Q24 results
13/03/2025 – Vaalco Energy (EGY US/LN): 4Q24 results
Caspian Sunrise is engaged in exploration and production of crude oil. Co. builds a portfolio of oil and gas exploration and production assets in Central Asia and in particular Kazakhstan.
DNO is a Norwegian exploration and production company focused on the Middle East and North Africa. Co. holds stakes in oil and gas blocks in various stages of exploration, development and production, both onshore and offshore, in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland.
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.
Okea ASA is a Norway-based oil company engaged in the oil and gas exploration and production industry. The Company contributes to the value creation on the Norwegian continental shelf with development and operation systems through the utilization of the result of previous and ongoing exploration activities in order to bring undeveloped oil on stream in strategic cooperation with service companies. Its services do not involve the exploration for petroleum. The Company operates an office in Trondheim, Norway.
Panoro Energy is an international independent oil and gas company engaged in the exploration and production of oil and gas resources in Brazil and West Africa. In Brazil, Co. participates in a number of oil and gas licenses located in the Santos basin outside the south-east coast of Brazil and in the Camamu-Almada basin in the state of Bahia. In West Africa, Co. participates in a number of licences in Nigeria and Gabon. As of Dec 31 2013, Co.'s commercial production is from the Manati field in Brazil.
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).
Savannah Petroleum is an oil and gas company. Co.'s principal activity is the management of its investment in Savannah Petroleum 1 Limited (SP1). SP1's principal activity is the management of its investment in Savannah Petroleum 2 Limited (SP2), and the provision of services to other companies within Co. SP2 has a 95% interest in Savannah Petroleum Niger R1/R2 S.A. whose principal activity is the exploration of hydrocarbons in the Republic of Niger.
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.
VAALCO Energy is an independent energy company engaged in the acquisition, exploration, development and production of crude oil. The company is primarily engaged in its Etame Production Sharing Contract related to the Etame Marin block located offshore the Republic of Gabon in West Africa. The company also owns interests in an undeveloped block offshore Equatorial Guinea, West Africa.
Valeura Energy is engaged in the exploration, development and production of petroleum and natural gas in Turkey and Western Canada. As of Dec 31 2010, proven gross reserves for light and medium oil was 116 thousand barrels (net reserves of 104 thousand barrels); proven gross reserves for heavy oil was 10 thousand barrels (net reserves of 9 thousand barrels); proven gross reserves for natural gas was 1,047 million cubic feet (net reserves of 938 million cubic feet); and proven gross reserves for natural gas liquids was 26 thousand barrels (net reserves of 19 thousand barrels).
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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