Equity Capital Markets and Advisory Business, Auctus Advisors

Auctus Advisors

Equity Capital Markets and Advisory Business

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.

Equity Bottom-Up

<ul>
<li>Calima has sold its Montney acreage and its Tommy Lakes facilities to Advantage Energy for A$11.4 mm. </li>
<li>The disposal of the Montney Assets will also result in operating and holding savings of approximately A$1 mm per year.</li>
<li>As we incorporate the proceeds for the disposition of the Montney assets in our valuation, we have trimmed our target price from A$0.50 per share to A$0.45 per share, which still represents &gt;5x the current share price.</li>
</ul>


Calima has sold its Montney acreage and its Tommy Lakes facilities to Advantage Energy for A$11.4 mm. 
The disposal of the Montney Assets will also result in operating and holding savings of approximately A$1 mm per year.
As we incorporate the proceeds for the disposition of the Montney assets in our valuation, we have trimmed our target price from A$0.50 per share to A$0.45 per share, which still represents &gt;5x the current share price.


Calima Energy Ltd (ASX: CE1): Selling the Montney assets. Increasing dividend distribution

Thematic (Sector/Industry)

<ul>
<li>ADX Energy (ADX AU)C; target price of A$0.10 per share: Growing production.</li>
<li>Anshof-3 production performance continues to exceed expectations with strong pressure support and deliverability with no water production.</li>
<li>Calima Energy (CE1 AU)C; target price of A$0.50 per share: Increasing dividend distribution to ~10% yield - 2Q23 production was 4,152 boe/d, above the estimates provided previously (4,125 boe/d).</li>
</ul>


ADX Energy (ADX AU)C; target price of A$0.10 per share: Growing production.
Anshof-3 production performance continues to exceed expectations with strong pressure support and deliverability with no water production.
Calima Energy (CE1 AU)C; target price of A$0.50 per share: Increasing dividend distribution to ~10% yield - 2Q23 production was 4,152 boe/d, above the estimates provided previously (4,125 boe/d).


<ul>
<li>2Q23 production was 4,152 boe/d, above the estimates provided previously (4,125 boe/d). </li>
<li>The J2J waterflood programme has added 170-300 bbl/d production, which we view as very encouraging since rolling out the waterflood programme to the rest of the asset could have a positive impact on recovery factors and reserves.</li>
<li>We now assume ~4,080 boe/d production in 2023 (~4,200 boe/d previously).</li>
</ul>


2Q23 production was 4,152 boe/d, above the estimates provided previously (4,125 boe/d). 
The J2J waterflood programme has added 170-300 bbl/d production, which we view as very encouraging since rolling out the waterflood programme to the rest of the asset could have a positive impact on recovery factors and reserves.
We now assume ~4,080 boe/d production in 2023 (~4,200 boe/d previously).


Calima Energy Ltd (ASX: CE1): Increasing Dividend Distribution to ~10% Yield

<ul>
<li>ADX Energy (ADX AU) C ; target price of A$0.100 per share: Exploration portfolio update in Austria: larger volume, lower risk – The exploration portfolio in Upper Austria is now estimated to hold 213 mmboe of best technical prospective resources (previously 200 mmboe) in 20 prospects.</li>
<li>The importance of the upgrade is as much about risk reduction as it is about resources increase.</li>
<li>The expansion of the portfolio also provides new opportunities for further farmouts. </li>
</ul>


ADX Energy (ADX AU) C ; target price of A$0.100 per share: Exploration portfolio update in Austria: larger volume, lower risk – The exploration portfolio in Upper Austria is now estimated to hold 213 mmboe of best technical prospective resources (previously 200 mmboe) in 20 prospects.
The importance of the upgrade is as much about risk reduction as it is about resources increase.
The expansion of the portfolio also provides new opportunities for further farmouts. 


<ul>
<li>While Calima received three unsolicited offers from Canadian entities to acquire assets from the company at a premium to Calima’s current market cap, the preferred transaction could not complete due to the volatility of the equity market.</li>
<li>Calima indicated that the rationale for Canadian entities to consider Calima’s assets as an attractive target was the disconnect between the earnings multiples at which Calima shares trade in Australia (~1.5x P/E for 2023 on our forecasts) and similar Canadian multiples (2.5-3.5x according to Calima).</li>
<li>Calima also anticipates 2Q23 free cash flow of A$7.5 mm, which is also well above our latest forecasts (~A$5 mm).</li>
</ul>


While Calima received three unsolicited offers from Canadian entities to acquire assets from the company at a premium to Calima’s current market cap, the preferred transaction could not complete due to the volatility of the equity market.
Calima indicated that the rationale for Canadian entities to consider Calima’s assets as an attractive target was the disconnect between the earnings multiples at which Calima shares trade in Australia (~1.5x P/E for 2023 on our forecasts) and similar Canadian multiples (2.5-3.5x according to Calima).
Calima also anticipates 2Q23 free cash flow of A$7.5 mm, which is also well above our latest forecasts (~A$5 mm).


Calima Energy Ltd (ASX: CE1): Asset sale not proceeding. High free cash flow in 2Q23.

Australia

Calima Energy Limited operates as an oil and gas company. The Company explores and produces petroleum products. Calima Energy invests in oil and gas projects internationally.

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Calima Energy (CE1 AU)

Calima Energy Ltd (ASX: CE1): Selling the Montney assets. Increasing dividend distribution

As we incorporate the proceeds for the disposition of the Montney assets in our valuation, we have trimmed our target price from A$0.50 per share...

Auctus Advisors

Auctus on Friday - 04/08/2023

Anshof-3 production performance continues to exceed expectations with strong pressure support and deliverability with no water production.

Auctus Advisors

Calima Energy Ltd (ASX: CE1): Increasing Dividend Distribution to ~10% Yield

The J2J waterflood programme has added 170-300 bbl/d production, which we view as very encouraging since rolling out the waterflood programme to...

Auctus Advisors

Auctus on Friday - 30/06/2023

The exploration portfolio in Upper Austria is now estimated to hold 213 mmboe of best technical prospective resources (previously 200 mmboe) in 20...

Auctus Advisors

Calima Energy Ltd (ASX: CE1): Asset sale not proceeding. High free cash flow in 2Q23.

Calima indicated that the rationale for Canadian entities to consider Calima’s assets as an attractive target was the disconnect between the...

Auctus Advisors

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