Criterium Energy Ltd (TSX-V: CEQ): Onshore gas development takes centre stage with potentially much lower capex
• 4Q24 production was 957 bbld (880 bbl/d in 3Q24). January's production so far is 1,020 bbl/d. This excludes the impact of the last four workovers of the 2024 programme. These workovers could boost production to 1,100-1,150 bbl/d. This level of production could be sustained throughout 2025 with a 10-13 workover programme costing less than US$1 mm.• 4Q24 G&A plus opex is estimated at US$2.97 mm, down from ~US$3.3 mm in 3Q24.
• The MGH-43 well has not yet been brought into production. Potential formation damage or reservoir depletion in the selected oil zones is suspected. Further activities including acidization will be undertaken.
• The Bulu divestment has not completed yet. Criterium is exploring other options in the event the divestment does not complete as originally intended.
• Focus in 2025 is likely to be on the SE MGH gas development. Criterium has signed an MOU with PT BlueEnergy in 4Q24 to monetize its gas using Galileo Technologies’ microLNG technology. This offers a lower capex alternative to constructing gathering lines and connecting to the main regional gas pipeline 12 kilometres away. Gas sales could commence in 1Q26.
• We have now excluded the proceeds from the Bulu divestment and any production contribution from the MGH-43 well from our forecasts. The negative impact on cash inflow is offset by assumptions of much lower FY25 capex as we now assume a gas development based on microLNG. We have changed our target price to C$0.30/sh in line with our new ReNAV.
Reflections on production and capex
We are now projecting 1,150 bbl/d production in 2025 (1,250 bbl/d previously). The overall capex for the gas development project, including the construction of a short pipeline to the main trunk and one additional well, is estimated to be
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.