Auctus on Friday - 23/06/2023
AUCTUS PUBLICATIONS________________________________________
Arrow Exploration (AXL LN)C; target price of £0.50 per share: CN-1 well in production at 1.1 mbbl/d from the C7 sands – The C7 formation (~26 feet of net oil pay) in the Carrizales Norte-1 well (CN-1) is now in production at a rate of 1.1 mbbl/d (550 bbl/d net to Arrow). The well produced very light oil (33.5 deg API) and is on pump set at the lowest setting. During the flow test, the sands flowed at a peak rate of 1,272 bbl/d. During the final hour of the test water cut stood at 12%. The water cut has decreased throughout the well test. This is one of the best initial production rates among the wells drilled by Arrow on Tapir, which highlights the very good reservoir quality of the C7 reservoir and the higher downhole pressure (the reservoir is deeper than at Rio Cravo Este). The flow rate achieved at the C7 sands is addition to the rate from the deeper Ubaque formation (1,600 bbl/d gross, 800 bbl/d net). Overall the CN-1 exploration well has flowed a total of 2.7 mbbl/d gross production from two zones on test. These two zones could be developed with a total of up to five wells. On 1 June Arrow held US$11.2 mm in cash. This is higher than our forecast at the end of June (~US$7 mm).
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Chariot (CHAR LN)C; target price of £0.55 per share: Multiple farm-in offers for Anchois received from E&P companies – The highlight of the announcement is about Chariot having received multiple offers to acquire a stake in the Anchois project in Morocco from multiple companies including significantly larger E&Ps. We understand that some of these potential partners could fund the development of the project from their balance sheets. These offers would leave Chariot with a material stake in the project and would include an important upfront cash consideration (on top of a carry). Chariot has already spent ~US$50 mm in the project and expects to recover a significant amount. The combination of the carry and the upfront payment reduce materially the risk of any significant dilution for Chariot shareholders. The key criteria for selecting a preferred partner include (in order of importance) (1) the capability of the partner to fund and deliver the project rapidly, (2) the stake in Anchois that Chariot would keep and (3) the amount of the upfront cash payment. The preferred partner is expected to be announced soon. We anticipate that this would be a re-rating event.
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Hartshead Resources (HHR CN)C; target price of A$0.17 per share: Submitting development plan – The Field Development Plan (FDP) for Hartshead’s Phase I gas development has been submitted to the NSTA. Hartshead has issued an invitation for tender for the Anning and Somerville platforms.
PetroTal (PTAL LN/TAL CN)C; target price of £1.50 per share: River blockade lifted. 22 mbbl/d production – The Indigenous Association for Development and Conservation of Bajo Puinahua (AIDECOBAP) has removed the illegal river blockade. AIDECOBAP has also released the Peruvian and Brazilian oil convoys. The Peruvian convoy represents ~40,000 bbl that will be sold at the Iquitos refinery. The Brazilian convoy was on its way to the field. We understand that 70,000 bbl have now been loaded to be sold through Brazil. The maintenance and installation work on the surface facilities has been completed and production has averaged 22 mbbl/d for the last 7 days. Subject to barge availability, 2Q23 production is expected to be 5% higher than the 17 mbbl/d guidance. Well 15H has started production and has produced at an average of 8.7 mbbl/d over the last seven days. This is another very good well.
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IN OTHER NEWS
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ASIA AND AUSTRALASIA
Falcon Oil & Gas (FOG LN/FO CN): Disappointing flow test at key Australia basin - The gas from the A2H well in the Beetaloo basin has flowed at an average rate of 0.97 mmcf/d over 50 days with circa 10% of the water used in the simulation programme recovered to date, well below other wells in the basin.
EUROPE
Barryroe Offshore Energy (BEY LN): Company liquidation – Barryroe will initiate an orderly wind down of the business through a Creditors Voluntary Liquidation.
Eni (ENI IM)/Var Energi (VAR NO): Acquiring Neptune Energy – Eni is acquiring Neptune’s entire portfolio other than its operations in Germany and Norway. The German operations will be carved out prior to the Eni transaction and the Norwegian operations will be acquired by Vår. The aggregate enterprise value implied by the transaction is US$4.9 bn. At YE22, Neptune held 484 mmboe of 2P reserves. The transaction will add ~130 mboe/d production to the Eni and Var portfolios.
Kistos (KIST LN): UK exploration well dry – The Benriach well, West of Shetland did not encounter gas in commercial quantities.
Lundin going back to Norway upstream – Attica Energy (backed by the Lundin family) is acquiring 99% in Concedo. Concedo holds exploration licences in Norway.
The Parkmead Group (PMG LN): Terminating key projects in the UK – Parkmead will not pursue the development of Perth.
MIDDLE EAST AND NORTH AFRICA
TAG Oil (TAO CN): Well update in Egypt – The BED 1-7 well has been flowed at an average rate of 140 bbl/d of oil with 5% water content at a constant ESP pump speed for two weeks at a constant ESP pump speed and wellhead choke of 10/64”.
SUB-SAHARAN AFRICA
Afentra (AET LN): Operating update in Angola – Recent gross production levels in Block 3/05 have continued to remain stable, averaging ~18,900 bbl/d. Production in Block 3/05A, at the Gazela field, has continued at ~ 1,100 bbl/d.
Front Range Resources is engaged in oil and natural gas exploration and production focusing on horizontal multi-stage frac development in Montney, Bluesky, Wilrich and Falher formations in the Deep Basin area of west central Alberta.
Chariot Oil & Gas is an independent oil and gas exploration company focused offshore in West Africa with a portfolio of assets located in the under-explored regions of Namibia, Mauritania and Morocco.
Eni is engaged in the oil and gas exploration and production, gas marketing operations, management of gas infrastructures, power generation, petrochemicals, oil field services and engineering industries. Co.'s operations are divided into three segments; Exploration and Production (oil and natural gas exploration and field development and production, as well as LNG operations), Gas and Power (supply, trading and marketing of gas and electricity, managing gas infrastructures for transport, distribution, storage, re-gasification, and LNG supply and marketing), and Refining and Marketing (supply of crude oil, refining and marketing of refined products). Co. maintains operations in 73 countries.
Parkmead Group is an independent oil and gas exploration and production company. As of June 30 2017, Co. produced gas from a portfolio of four fields across the Netherlands and held oil and gas interests spanning 26 exploration and production blocks.
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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