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.

Thematic (Sector/Industry)

<ul>
<li>Chariot (CHAR LN)C: target price of £0.50 per share: Key step towards developing future gas to industry business onshore Morocco – Chariot has signed Heads of Terms with Vivo Energy for the future offtake from the Loukos onshore licence where natural gas has been encountered at Dartois.</li>
<li>Up to 3 mmcf/d would be initially sold to the CNG midstream business under a long-term gas sales agreement.</li>
<li>Vivo intends to design, fund, construct and operate a CNG plant and virtual distribution network to transport natural gas from a number of sources to existing and new industrial customers in Morocco.</li>
</ul>


Chariot (CHAR LN)C: target price of £0.50 per share: Key step towards developing future gas to industry business onshore Morocco – Chariot has signed Heads of Terms with Vivo Energy for the future offtake from the Loukos onshore licence where natural gas has been encountered at Dartois.
Up to 3 mmcf/d would be initially sold to the CNG midstream business under a long-term gas sales agreement.
Vivo intends to design, fund, construct and operate a CNG plant and virtual distribution network to transport natural gas from a number of sources to existing and new industrial customers in Morocco.


Equity Bottom-Up

<ul>
<li>The FY23 operating cashflow after interests of ~US$9 mm was above our forecasts (US$7 mm) due to change of working capital.</li>
<li>We expected a negative change of working capital given (1) Zephyr had to make advance payments for the remedial of the State 36-2R well ahead of being reimbursed by the insurance and (2) the fact that the proceeds of the production for the Slawson wells were not received until part way through 1H24.</li>
<li>Zephyr’s revolving credit facility (RCF) has been redetermined with an unchanged borrowing base (compared to December 2023) of US$15.15 mm.</li>
</ul>


The FY23 operating cashflow after interests of ~US$9 mm was above our forecasts (US$7 mm) due to change of working capital.
We expected a negative change of working capital given (1) Zephyr had to make advance payments for the remedial of the State 36-2R well ahead of being reimbursed by the insurance and (2) the fact that the proceeds of the production for the Slawson wells were not received until part way through 1H24.
Zephyr’s revolving credit facility (RCF) has been redetermined with an unchanged borrowing base (compared to December 2023) of US$15.15 mm.


Zephyr Energy Plc (AIM: ZPHR): Reducing the cost of debt. Testing at State 36-2R to start imminently

<ul>
<li>Chariot (CHAR LN) C: target price of £0.50 per share: High impact well offshore Morocco on track to spud in August – The FY23 financials were in line with our forecasts.</li>
<li>The high impact Anchois East well is expected to spud in August.</li>
<li>A drilling success could increase the size of Anchois to over 1 tcf (300 bcf net to Chariot).</li>
</ul>


Chariot (CHAR LN) C: target price of £0.50 per share: High impact well offshore Morocco on track to spud in August – The FY23 financials were in line with our forecasts.
The high impact Anchois East well is expected to spud in August.
A drilling success could increase the size of Anchois to over 1 tcf (300 bcf net to Chariot).


<ul>
<li>The State 36-2R well has reached TD.</li>
<li>The well penetrated a folded and naturally fractured section of the Cane Creek reservoir, encountering drilling mud gas shows of a similar magnitude to the original well.</li>
<li>Pore pressure analysis suggests formation pressures estimated at approximately 9,300 psi (which is broadly consistent with previously drilled offset wells).</li>
</ul>


The State 36-2R well has reached TD.
The well penetrated a folded and naturally fractured section of the Cane Creek reservoir, encountering drilling mud gas shows of a similar magnitude to the original well.
Pore pressure analysis suggests formation pressures estimated at approximately 9,300 psi (which is broadly consistent with previously drilled offset wells).


Zephyr Energy Plc (AIM: ZPHR): Spotless Execution at Twinning of High Impact Well.

<ul>
<li>Criterium Energy (CEQ CN) C: target price of C$0.35 per share: Re-iterating production guidance – 1Q24 production was 802 bbl/d with average realized price of US$82/bbl.</li>
<li>This is in line with our expectations.</li>
<li>Operating netbacks for the period stood at C$2.2 mm, also in line with our expectations.</li>
</ul>


Criterium Energy (CEQ CN) C: target price of C$0.35 per share: Re-iterating production guidance – 1Q24 production was 802 bbl/d with average realized price of US$82/bbl.
This is in line with our expectations.
Operating netbacks for the period stood at C$2.2 mm, also in line with our expectations.


United Kingdom

Zephyr Energy plc operates as a technology-led exploration and production company. The Company focuses on the delivery of economic returns from developed oil and gas projects in the Rocky Mountain region of the United States.

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Zephyr Energy (ZPHR LN)

AUCTUS ON FRIDAY - 28/06/2024

Chariot has signed Heads of Terms with Vivo Energy for the future offtake from the Loukos onshore licence where natural gas has been encountered at...

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Reducing the cost of debt. Testing at State 36-2R to start imminently

The FY23 operating cashflow after interests of ~US$9 mm was above our forecasts (US$7 mm) due to change of working capital.

Auctus Advisors

AUCTUS ON FRIDAY - 14/06/2024

Chariot (CHAR LN) C: target price of £0.50 per share: High impact well offshore Morocco on track to spud in August – The FY23 financials were in...

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Spotless Execution at Twinning of High Impact Well.

Pore pressure analysis suggests formation pressures estimated at approximately 9,300 psi (which is broadly consistent with previously drilled...

Auctus Advisors

AUCTUS ON FRIDAY - 07/06/2024

Criterium Energy (CEQ CN) C: target price of C$0.35 per share: Re-iterating production guidance – 1Q24 production was 802 bbl/d with average...

Auctus Advisors

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