Report
Stephane Foucaud

Sintana Energy Inc. (TSX-V: SEI): Woodside does not farm-into PEL 87 – Opportunity for equity investors

• Woodside has elected not to exercise its option to farm into PEL 87. While this decision is disappointing and likely to result in some delays until Pancontinental secures a new partner, it likely reflects Woodside’s increased focus on LNG and its recent reduction in exploration spending. The company is currently advancing three capital-intensive development projects: Scarborough LNG (7.3 Tcf, ~80% complete), Trion Oil (20% complete), and the recently acquired Louisiana LNG expansion.
• PEL 87 remains the sole block in the core area of the Orange Basin without a major operator. Pancontinental is already in discussions with new potential farm-in partners. In January, Pancontinental announced upgrades to two primary exploration leads in the Saturn Complex - Oryx and Hyrax - both showing AVO anomalies. Pancontinental is now evaluating the prospective resources and the chance of success for each lead.
• The current exploration period for PEL 87 expires in January 2026 but can be extended and renewed. Obligations during this period are manageable, requiring either one well, 500 km² of 3D seismic, or 1,000 km of 2D seismic. The 3D commitment is significantly smaller than Woodside’s previous 6,600 km² seismic campaign, which cost over US$30mm. In any case, Sintana is carried by Pancontinental through to FID.
• In light of the uncertainty surrounding a new farm-in partner, we have increased the risk factor associated with PEL 87 and changed our target price to C$1.80/sh. However, we view the current share price weakness as an opportunity. The current market cap represents only 50% of our valuation (net of capital gains tax) for Sintana’s interest in the Mopane discovery.

What next?
Galp’s farm-in process for Mopane is ongoing, and securing a partner would provide a clear valuation benchmark for the assets. We currently value Mopane at C$1.22/sh. Chevron is anticipated to resume drilling at PEL 90 in 4Q25. We carry C$0.81/sh unrisked NAV for PEL 90. Chevron is also expected to drill a well on PEL 82 (Sintana WI: 4.9%) in the Walvis basin. We carry C$0.24/sh unrisked for PEL 82. For PEL 87, our unrisked NAV is C$1.81/sh.

Valuation
We value Sintana’s interest in Mopane based on the most recent price paid by Africa Oil for shares in Impact Oil & Gas, to which we previously applied a 10% discount factor. Our total unrisked NAV is ~C$4.39/sh. We assume 20% chance of success for PEL 87.
Underlying
Sintana Energy

Sintana Energy is a development stage company engaged in oil and gas exploration and development activities in the United States.

Provider
Auctus Advisors
Auctus Advisors

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. 

Analysts
Stephane Foucaud

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