Criterium Energy Ltd (TSX-V: CEQ): Gas development on track. Capex to first gas guidance reduced again
• Pipeline construction for the SE-MGH 5–7 mmcf/d development is scheduled to begin in early 2026, with first gas expected in 1H26. Capex has been reduced further to US$2–3 mm (from US$2.5–4 mm), of which US$1.7 mm has already been spent. The subsequent North MGH development (incremental capex of ~US$1 mm) would lift total production to 7–10 mmcf/d.• The company now expects gas prices of US$6-7/mc, in line with recent South Sumatra sales, versus the prior assumption of US$5–7/mcf.
• Criterium held C$1.8 mm in cash at the end of September and expects to fund the gas development directly from its balance sheet.
• An extended well test of multiple zones at N-MGH is planned for 1Q26. The MGH-20 well previously tested at 2.5 mmcf/d with associated oil from a single interval, with several additional potentially gas-bearing zones to be tested.
• The facility processing fee remains the key outstanding negotiation item, but agreement is expected shortly.
• We re-iterate our target price of C$0.35 per share.
Gas transaction in Indonesia – A blue print for Bulu?
Criterium has signed a Memorandum of Understanding with PT Kalimantan Jawa Gas to collaborate on gas development and transportation for industrial supply to Central, East, and West Java, leveraging an existing pipeline located ~25 km from the Lengo Field in the adjacent Muriah PSC. Separately, Conrad Asia Energy announced the divestment of a 75% working interest in the Mako discovery to Arsari. In return, Arsari will carry Conrad to first production through a loan structure, repayable from cash flow. The transaction also includes US$16 mm in cash consideration, payable in three tranches: US$5 mm (1Q26), US$4 mm (2Q26), and US$7 mm (3Q27). We believe this transaction underscores the strong regional interest in natural gas assets. Notably, Mako (~430 bcf 2C gross contingent resources) and Bulu (~360 bcf) are of comparable scale. The terms of the Mako deal provide a clear benchmark for what can be achieved in Indonesia.
Valuation
Criterium shares trade at ~30% discount to our 2P NAV based on the oil reserves alone. Developing SE-MGH and North MGH would add C$0.14 per share, Macan Gedang, C$0.08 per share and Cerah, C$0.14 per share for a total potential valuation of C$0.36 per share. We are not carrying any value for MGH-43 pending visibility on resources. Our ReNAV for Criterium is C$0.31 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.
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