Sintana Energy Inc. (TSX-V: SEI): Reloading in Namibia
• Sintana is acquiring up to 67% of Giraffe Energy from Crown Energy. Giraffe holds 33% interest in PEL79, located inboard of blocks operated by BW Energy, Rhino Resources and Shell. NAMCOR, Namibia’s national company, holds 67% in the licence.• The success at PEL83 has proven that the shallower water area in the Orange basin can be very attractive. PEL79 is one of the last remaining licenses in the basin not operated by a private operator. There is already over 4,760 km of 2D seismic, 1137 km2 of 3D seismic and 1 well with gas shows (Kudu source rock) on the licence. Sintana has partnered with the previous country manager of Galp to assess and acquire the asset.
• Sintana indicates that BW Energy has acquired 4,600 km2 of new 3D seismic over PEL3, located directly west of PEL79, in 2023 and has moved to initiate an oil-focused exploration campaign.
• Rhino Resources, operator of PEL85 which sits directly outboard to the west of the southern reach of PEL79, is progressing with the planning and contracting of a two-well campaign expected to start in 4Q24.
• There are very limited work program commitments through the remaining licence period.
• Pending further details on the prospectivity of PEL79, we re-iterate our target price of C$1.60 per share. We are not attributing any value yet to the potential material upside on PEL83.
The transaction
Sintana is initially acquiring 49% of Giraffe for US$2 mm. Sintana has a 5 year option to acquire a further 18% for US$1 mm.
Value build-up
Our unrisked value of each of Sintana’s 4.9% interest in PEL90 and PEL83 is C$0.86/sh and of Sintana’s 7.3% interest in PEL87 is C$1.26/sh. Our valuation of PEL83 reflects only the 10 bn bbl of oil in place discovered so far. We value Sintana’s interest in PEL79 at US$3 mm for the time being. Overall our ReNAV for Sintana is C$1.59/sh. The possible farm-out of Galp’s interest in PEL83 could also be a rerating event.
Sintana Energy is a development stage company engaged in oil and gas exploration and development activities in the United States.
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.