Sintana Energy Inc. (TSX-V: SEI): Materiality and diversification

• The completion of the acquisition by Sintana of Challenger creates one of the largest listed exploration-focused companies with a market cap of ~US$155 mm. The group benefits from a dual listing in London and Toronto.
• The enlarged platform offers exposure to a geographically diverse set of exploration and appraisal assets, unified by common geological themes on both sides of the South Atlantic conjugate margin. Each jurisdiction provides material scale and the potential for high-impact news flow.
• Sintana’s 4.9% indirect interest in the giant Mopane discovery in the Orange basin of Namibia underpins the company’s value, with WI contingent resources of ~43 mmboe. With TotalEnergies becoming operator, further exploration and appraisal drilling is expected in 2026. This could increase the size of the prize. Sintana’s stake in Mopane becomes more attractive to counterparties such as QatarEnergy (often a partner to TotalEnergies). Additional drilling with Chevron at PEL 82 and PEL 90, together with a farm-down at PEL 87 anticipated by YE26 or early 2027, would further de-risk Sintana’s other three Namibian offshore blocks.
• The entire Uruguay offshore acreage is now licensed across seven exploration blocks, drawing increasing interest from majors and supermajors including Chevron, Shell, Apache, YPF, and, since November, Eni. Sintana holds interests in two blocks with prospective resources of 1.18 bn boe - potentially the company’s most material assets. Chevron is partnered with Sintana at OFF-1, while a farm-out process is underway for OFF-3. Apache may drill a first exploration well at adjacent OFF-6 in 2026.
• Sintana’s onshore Angola entry is anticipated to close in 1Q26. Drilling at KON-16 is expected to commence by YE26.
• Our target price is C$1.55/sh in line with our ReNAV.

Valuation and newsflow
• We assign a value of C$0.75/sh to the company based solely on the Mopane discovery. Our valuation references the Africa Oil/Impact Oil & Gas transaction at PEL 56. On its recent call, Galp indicated that a ~10% interest in PEL 56 and PEL 91 accounted for ~30% of the overall value of its divestment of 40% of Mopane to Total.
• Unrisked values for PEL-90 and PEL-82 in Namibia are C$0.67/sh and C$0.25/sh, respectively. A successful farm-out of PEL-87 by Pancontinental would begin to de-risk the licence, with an unrisked NAV of C$0.99/sh.
• Drilling success at KON-16 could add a further C$0.14/sh.
• Our valuation for Uruguay, based on achieved and expected farm-in terms, stands at C$0.31/sh. As drilling programmes advance and new entrants join Uruguay, we expect licence values to rise. Assuming a conservative US$2/bbl for a discovery, Uruguay’s unrisked value could reach C$6.26/sh, making it potentially the most material component of the portfolio.
• Our overall unrisked NAV is C$9.37/sh. Our ReNAV is C$1.55/sh.