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>4Q23 production of 2,793 boe/d and YE23 net debt of US$26.7 mm were in line with forecasts.</li>
<li>The GH 14-06 #3 Upper Selma Chalk well delivered an IP30 rate of 5.2 mmcf/d.</li>
<li>This is a good rate compared to the other Upper Selma Chalk wells of 2022-2023 which had IP30 rates of 3.3-6.5 mmcf/d.</li>
</ul>


4Q23 production of 2,793 boe/d and YE23 net debt of US$26.7 mm were in line with forecasts.
The GH 14-06 #3 Upper Selma Chalk well delivered an IP30 rate of 5.2 mmcf/d.
This is a good rate compared to the other Upper Selma Chalk wells of 2022-2023 which had IP30 rates of 3.3-6.5 mmcf/d.


Southern Energy Corp. -  Managing the Balance Sheet in the Context of Low US Gas Prices

<ul>
<li>The recently completed GH 14-06 #3 Upper Selma Chalk well at Gwinville has delivered average natural gas flow rate in excess of 6.5 mmcf/d over the first days of production.</li>
<li>By comparison, the 18-10#2 Upper Selma Chalk well completed in 1Q23 had an IP rate of only 3.3 mmcf/d.</li>
<li>The three wells that are awaiting completion include the first two Lower Selma Chalk laterals, along with the second City Bank lateral.</li>
</ul>


The recently completed GH 14-06 #3 Upper Selma Chalk well at Gwinville has delivered average natural gas flow rate in excess of 6.5 mmcf/d over the first days of production.
By comparison, the 18-10#2 Upper Selma Chalk well completed in 1Q23 had an IP rate of only 3.3 mmcf/d.
The three wells that are awaiting completion include the first two Lower Selma Chalk laterals, along with the second City Bank lateral.


Southern Energy Corp. (SOUC LN/SOU CN): Positive Results at First DUC

<ul>
<li>2Q23 production stood at 2,651 boe/d, in line with 1Q23 (2,607 boe/d).</li>
<li>Net debt at the end of March stood at ~US$26.2 mm including working capital (net debt at the end of March: US$19.7 mm).</li>
<li>We now forecast 3,070 boe/d production in 2023 (with ~US$9-10 mm capex in 2H23) increasing to ~5.2 mboe/d in 2024.</li>
</ul>


2Q23 production stood at 2,651 boe/d, in line with 1Q23 (2,607 boe/d).
Net debt at the end of March stood at ~US$26.2 mm including working capital (net debt at the end of March: US$19.7 mm).
We now forecast 3,070 boe/d production in 2023 (with ~US$9-10 mm capex in 2H23) increasing to ~5.2 mboe/d in 2024.


South Energy Corp. (SOUC LN/SOU CN): Returning to Growth from 3Q23

<ul><li>1Q23 production stood at 2,607 boe/d, which is in line with our forecasts.</li><li>The company held ~US$12 mm in cash, which is line with previous indications.</li><li>Southern has achieved drilling cost efficiencies and the cost of drilling and completing new wells is expected to be around US$5.7 mm.</li></ul>

1Q23 production stood at 2,607 boe/d, which is in line with our forecasts.The company held ~US$12 mm in cash, which is line with previous indications.Southern has achieved drilling cost efficiencies and the cost of drilling and completing new wells is expected to be around US$5.7 mm.

Southern Energy Corp. (SOUC LN/SOU CN): Drilling Cost Down.

<ul><li>Southern is acquiring the remaining producing acreage (&gt;8,500 acres) in the Gwinville field it does not own from PetroTx Energy for US$3.2 mm in cash.</li><li>PetroTX will also be granted a minor overriding royalty over two of the acquired wells that were previously producing 0.4 mmcf/d.</li><li>The transaction adds 400 boe/d net production, 1.8 mmboe PDP reserves and 14.5 mmboe 2P reserves (+57% versus the YE22 2P reserves of 25.5 mmboe) in the Selma Chalk to Southern with 20+ new drilling locations.</li></ul>

Southern is acquiring the remaining producing acreage (&gt;8,500 acres) in the Gwinville field it does not own from PetroTx Energy for US$3.2 mm in cash.PetroTX will also be granted a minor overriding royalty over two of the acquired wells that were previously producing 0.4 mmcf/d.The transaction adds 400 boe/d net production, 1.8 mmboe PDP reserves and 14.5 mmboe 2P reserves (+57% versus the YE22 2P reserves of 25.5 mmboe) in the Selma Chalk to Southern with 20+ new drilling locations.

South Energy Corp. - Taking Advantage of Low Gas Price to Make an Accretive Acquisition

Canada

Southern Energy Corp. operates as an oil and natural gas exploration and production company. The Company focuses on developing conventional and unconventional light oil and liquids rich natural gas resources. Southern Energy serves customers in Canada and the United States.

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Southern Energy Corp (SOUC LN)

Southern Energy Corp. - Managing the Balance Sheet in the Context of Low US Gas Prices

4Q23 production of 2,793 boe/d and YE23 net debt of US$26.7 mm were in line with forecasts. The GH 14-06 #3 Upper Selma Chalk well delivered an...

Auctus Advisors