Criterium Energy Ltd (TSX-V: CEQ): Gas development capex only US$3-5 mm. FY25 debt repayment reduced by US$2 mm.
• FY25 oil production is expected to be 1,000-1,200 bbl/d with 8-12 work-overs costing US$0.04-0.07 mm per well (total of US$0.32-US$0.84 mm). This in line with our expectations (1,150 bbl/d production and ~US$1 mm capex).• The capex requirement to reach first gas in 1Q26 at SE MGH based on modular LNG is now estimated at US$3-5 mm (we assumed US$5 mm). This is significantly lower than the initial estimate of US$14 mm, which included the construction of a short pipeline to the main trunk. Restarting the SEM-01 discovery well (which flowed at 8 mmcf/d during testing) is expected to result in initial gas production of approximately 4-7 mmcf/d. An additional well, to be drilled six months later, would increase gas production to around 8 mmcf/d.
• Criterium has negotiated US$2 mm in reduced debt payments for 2025, with further reductions likely available should the need arise. These reduced payments will see a ~US$0.3 mm/month reduction in cash outflow. This is very important for the balance sheet.
• We re-iterate our target price of C$0.30 per share in line with our ReNAV.
Gas at Tungkal
The Tungkal PSC contains 20 bcf of 2C contingent gas resources as well as a P50 prospective resource of 27 mmboe near existing infrastructure. Gas in place at SE MGH is estimated at 17 bcf (P50), suggesting ~13 bcf recoverable resources assuming a 75% recovery factor. Macan Gedang and Cerah would add a further 39 bcf of gas in place (~29 bcf recoverable). In early Q3 Criterium will conduct an extended well test on the existing SE-MGH well to confirm deliverability. The test results will allow Criterium to enter into a gas sales agreement.
Valuation
Our Core NAV is unchanged at C$0.30 per share with a ReNAV of C$0.32 per share.
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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