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>2Q24 production of 2,578 boe/d was in line with our forecasts (2,680 boe/d). In addition, ~150 boe/d are currently shut-in pending lowcost workovers.</li>
<li>Net debt (based on cash and debt) at the end of June was ~US$18.7 mm.</li>
<li>This compares with our forecasts of US$19.1 mm but Southern has sold two compressors for US$1.36 mm. </li>
</ul>


2Q24 production of 2,578 boe/d was in line with our forecasts (2,680 boe/d). In addition, ~150 boe/d are currently shut-in pending lowcost workovers.
Net debt (based on cash and debt) at the end of June was ~US$18.7 mm.
This compares with our forecasts of US$19.1 mm but Southern has sold two compressors for US$1.36 mm. 


Southern Energy Corp. (SOUC LN/SOU CN): Improved Gas Fundamentals Expected in 4Q24

<ul>
<li>1Q24 production of 3,009 boe/d was in line with our forecasts.</li>
<li>The net debt at the end of March was ~US$1 mm below our expectations.</li>
<li>We continue to assume that the 2nd DUC will not be completed before 4Q24 with the further DUCs being completed in 1Q25 and 2Q25.</li>
</ul>


1Q24 production of 3,009 boe/d was in line with our forecasts.
The net debt at the end of March was ~US$1 mm below our expectations.
We continue to assume that the 2nd DUC will not be completed before 4Q24 with the further DUCs being completed in 1Q25 and 2Q25.


Southern Energy Corp: Increased Premium to Henry Hub Suggests Strong Underlying Fundamentals

<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

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)