Criterium Energy Ltd (TSX-V: CEQ): High production in September. The drilling programme has commenced
• Current production has reached 950 bbl/d, representing an increase of 90 bbl/d since August. This reflects the very good performance of the work-over programme with 98 bbl/d incremental production from three new workovers in Tranche 3 from early August.• Overall, the programme (three tranches with a total of 11 work-overs so far) has delivered 227 bbl/d of incremental production.
• In addition, the work-over of MGH-48 has encountered gas, which will be used as feed gas to reduce the consumption of diesel, reducing operating costs.
• The total cost of the work-over programme was US$0.6 mm, delivering US$1.4 mm of incremental pre-tax cash flow so far.
• The next tranche of 1-4 work-overs will be undertaken in 4Q24.
• Drilling operations have commenced with the MGH-43 well spudding in early September. It will be followed by the MGH-40 well. Both wells are expected to be on stream in November. Each well is expected to add ~150 bbl/d each with minimal added variable cost. This is expected to result in per bbl operating costs decreasing by 30%.
• We continue to forecast that Criterium will exit 2024 with ~1,250 boe/d production. The total cost of the FY24 activity programme remains estimated at ~US$4.5 mm.
• Completing the divestment of Bulu for US$7.75 mm remains a key event as this would allow the company to reduce its debt and/or accelerate its drilling programme.
• We re-iterate our target price of C$0.35/sh in line with our ReNAV.
Valuation
Our Core NAV and ReNAV are unchanged at respectively C$0.22/sh and C$0.32/sh.
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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