Sintana Energy Inc. (TSX-V: SEI): Sintana Energy Inc. (TSX-V: SEI): More drilling in Namibia
• QatarEnergy has acquired 27.5% WI in PEL 90 from Chevron. While no details have been disclosed, it's noteworthy that QatarEnergy is a partner of TotalEnergies on the adjacent PEL 56 license, where the Venus discovery is located. QatarEnergy is also a partner of Shell on PEL 39.• We view QatarEnergy’s decision to enter PEL 90 as a very positive sign regarding the block's prospectivity.
• A rig is mobilizing to PEL 90 to drill the Kapana-1X well in the second half of December.
• This is an ultra-deepwater offshore well, in water depths similar to those drilled by TotalEnergies at PEL 56 (Venus discovery). We anticipate that the Kapana-1X well will take around three months to drill complete and analyze at a cost of approximately US$100-150 mm, in line with the wells drilled by TotalEnergies. Sintana is carried for these costs.
• TotalEnergies is looking for basin floor fan prospects at PEL 56, and we believe that the targeted play at PEL 90 is similar. We believe that the first prospect has been high-graded from an inventory of potential targets.
• We anticipate multiple high-impact drilling newsflows on Sintana assets in 1H25. In addition to the Kapana-1X on PEL 90, we expect the results of the Mopane-2A appraisal well on PEL 83 around mid-1Q25. The Mopane-3X exploration well (PEL 83) is expected to be spud in April. We estimate the additional unrisked value of the upcoming drilling program at PEL 83 (Galp), PEL 90 (Chevron), and PEL 87 at C$2.80 per share.
• A rig is now on location at bp/Eni/Rhino Resources PEL 85 and exploration drilling is about to start. This block is adjacent to Sintana’s PEL 83 and PEL 79.
• We re-iterate our target price of C$1.85 per share.
Valuation
We value Sintana’s interest in Mopane based on the most recent price paid by Africa Oil for shares in Impact Oil & Gas. We value Sintana on Mopane alone at C$1.08/sh (C$1.22/sh unrisked). Our total unrisked NAV is ~C$4.54/sh. Our ReNAV is C$1.87/sh.
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.
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