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>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.

Thematic (Sector/Industry)

<ul><li>ADX Energy (ADX AU)C: Target price of A$0.100 per share: 1Q23 in line with expectations.</li><li>In March net production from Anshof has increased to 94 bbl/d.</li><li>Calima Energy (CE1 AU)C; target price of A$0.50 per share: Better than expected performance.</li></ul>

ADX Energy (ADX AU)C: Target price of A$0.100 per share: 1Q23 in line with expectations.In March net production from Anshof has increased to 94 bbl/d.Calima Energy (CE1 AU)C; target price of A$0.50 per share: Better than expected performance.

<ul><li>1Q23 production was 4,532 boe/d slightly higher than previous indications (~4,500 boe/d) and our initial expectations (4,378 boe/d) given the strong performance of recent wells.</li><li>This is higher than we anticipated (3,935 boe/d) given the better-than-expected performance of the recently completed Pisces #8 and #9 wells.</li><li>These wells were tied-in late in 1Q23 and were ~22% longer and had 15 additional fracs each, compared to the 12-23 well, resulting in anticipated higher production and reserves.</li></ul>

1Q23 production was 4,532 boe/d slightly higher than previous indications (~4,500 boe/d) and our initial expectations (4,378 boe/d) given the strong performance of recent wells.This is higher than we anticipated (3,935 boe/d) given the better-than-expected performance of the recently completed Pisces #8 and #9 wells.These wells were tied-in late in 1Q23 and were ~22% longer and had 15 additional fracs each, compared to the 12-23 well, resulting in anticipated higher production and reserves.

Calima Energy Ltd (ASX: CE1): Better than Expected Performance.

<ul><li>Arrow Exploration (AXL LN) C; Target price of £0.45 per share: Adding reserves in Colombia – Arrow’s 1P, 2P and 3P reserves were estimated at respectively 3.4 mmboe, 7.7 mmboe and 11.7 mmboe at YE22.</li><li>This includes 2.1 mmboe 2P reserves and 4.3 mmboe 3P reserves at the company’s core assets in Colombia (Tapir and Oso Pardo).</li><li>Calima Energy (CE1 AU) C; Target price of A$0.50 per share: Replacing over 100% of produced reserves – YE22 net 2P reserves have been estimated at 20.5 mmboe (net of royalty), up 1% compared to YE21.</li></ul>

Arrow Exploration (AXL LN) C; Target price of £0.45 per share: Adding reserves in Colombia – Arrow’s 1P, 2P and 3P reserves were estimated at respectively 3.4 mmboe, 7.7 mmboe and 11.7 mmboe at YE22.This includes 2.1 mmboe 2P reserves and 4.3 mmboe 3P reserves at the company’s core assets in Colombia (Tapir and Oso Pardo).Calima Energy (CE1 AU) C; Target price of A$0.50 per share: Replacing over 100% of produced reserves – YE22 net 2P reserves have been estimated at 20.5 mmboe (net of royalty), up 1% compared to YE21.

<ul>
<li>Arrow Exploration (AXL LN) C; Target price of £0.45 per share: Good flow rate at RCE-4 – The RCE-4 well has been put in production.</li>
<li>This is a similar result as at RCE-3 (24 h flow rate of 968 bbl/d gross/484 bbl/d net).</li>
<li>Serinus Energy (SEN LN): FY22 results – FY22 production was 889 boe/d including 379 boe/d in Romania and 510 boe/d in Tunisia.</li>
</ul>


Arrow Exploration (AXL LN) C; Target price of £0.45 per share: Good flow rate at RCE-4 – The RCE-4 well has been put in production.
This is a similar result as at RCE-3 (24 h flow rate of 968 bbl/d gross/484 bbl/d net).
Serinus Energy (SEN LN): FY22 results – FY22 production was 889 boe/d including 379 boe/d in Romania and 510 boe/d in Tunisia.


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): 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

Auctus on Friday - 05/05/2023

ADX Energy (ADX AU)C: Target price of A$0.100 per share: 1Q23 in line with expectations.In March net production from Anshof has increased to 94 bbl/d.

Auctus Advisors

Calima Energy Ltd (ASX: CE1): Better than Expected Performance.

1Q23 production was 4,532 boe/d slightly higher than previous indications (~4,500 boe/d) and our initial expectations (4,378 boe/d) given the...

Auctus Advisors

Auctus on Friday - 31/03/2023

Arrow Exploration (AXL LN) C; Target price of £0.45 per share: Adding reserves in Colombia – Arrow’s 1P, 2P and 3P reserves were estimated at...

Auctus Advisors

Auctus on Friday - 24/03/2023

Arrow Exploration (AXL LN) C; Target price of £0.45 per share: Good flow rate at RCE-4 – The RCE-4 well has been put in production.

Auctus Advisors

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