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>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>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>1Q24 production (excluding NGL) in the Williston was 1,151 boe/d.</li>
<li>This is 140 boe/d above our expectations and ~100 boe/d above 4Q23 production.</li>
<li>Production in March (excluding NGL) had increased to 1,212 boe/d.</li>
</ul>


1Q24 production (excluding NGL) in the Williston was 1,151 boe/d.
This is 140 boe/d above our expectations and ~100 boe/d above 4Q23 production.
Production in March (excluding NGL) had increased to 1,212 boe/d.


Zephyr Energy Plc (AIM: ZPHR): Higher 1Q24 Production than We Anticipated. All Eyes on High Impact Drilling in the Paradox

<ul>
<li>In October 2023, Zephyr announced the acquisition of at least a 75% WI in the Salt Wash field, located ~3 miles to the south of the Paradox project.</li>
<li>Salt Wash has a 15 feet oil rim, above which is an inert gas cap (~500 feet of gas column) which consists of ~72% nitrogen, 22% hydrocarbon gases, and 1.4% to 1.7% helium content.</li>
<li>The field was abandoned in 2014 after having produced 1.65 mmbbl of oil and 11.7 bcf of natural gas.</li>
</ul>


In October 2023, Zephyr announced the acquisition of at least a 75% WI in the Salt Wash field, located ~3 miles to the south of the Paradox project.
Salt Wash has a 15 feet oil rim, above which is an inert gas cap (~500 feet of gas column) which consists of ~72% nitrogen, 22% hydrocarbon gases, and 1.4% to 1.7% helium content.
The field was abandoned in 2014 after having produced 1.65 mmbbl of oil and 11.7 bcf of natural gas.


Zephyr Energy Plc (AIM: ZPHR): Potential for helium well to be drilled mid 2024

<ul>
<li>4Q23 production in the Williston was 1,053 boe/d.</li>
<li>This only reflects oil and natural gas production.</li>
<li>Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d).</li>
</ul>


4Q23 production in the Williston was 1,053 boe/d.
This only reflects oil and natural gas production.
Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d).


Zephyr Energy Plc (AIM: ZPHR): Gearing-up for the return to drilling in the Paradox

United Kingdom

Pharos Energy PLC is an independent oil and gas exploration and production company. The Company focuses on growth and returns to stakeholders, headquartered in London and listed on the London Stock Exchange. Pharos Energy has production, development, and exploration interests in Egypt, Israel, and Vietnam.

Rockhopper Exploration Plc operates as an oil and gas exploration and production company in the United Kingdom. It engages in the exploration and exploitation of its oil and gas acreage primarily in the North Falkland Basin and the Greater Mediterranean region. It holds 95.50% interests in the PL003a production licenses; 60.50% interests in PL003b production licenses; 64.00% interests in PL004a, PL004b, and PL004c production licenses; 100% interests in PL005 production licenses; and 40% interests in PL032 and PL033 production licenses. The company also holds a portfolio of production and exploration interests in Italy, Malta, and Croatia. Rockhopper Exploration Plc was founded in 2004 and headquartered in Salisbury, the United Kingdom.

NWF Group plc, together with its subsidiaries, engages in the agricultural and distribution business delivering feed, food, and fuel in the United Kingdom. The company?s Feeds segment manufactures and sells animal feed and other agricultural products to farmers, as well as supplies seeds. Its Fuels segment sells and distributes domestic heating, industrial, and road fuels to domestic and commercial customers; and distributes fuel cards. This segment operates a network of 17 fuel depots. The company?s Food segment is involved in the warehousing and distribution of ambient grocery and other products to supermarket and other retail distribution centers. The company is also involved in agriculture nutritional advisory business. NWF Group plc was founded in 1871 and is headquartered in Nantwich, the United Kingdom.

Chariot Limited is an independent oil and gas exploration group focused on Namibia and Mauritania.

Afentra PLC is an independent Oil & Gas company focused on the African Energy Transition. The Company has a current interest in a high potential exploration project, onshore southwestern Somaliland.

Petro Matad Limited is a holding company. The Company, through its subsidiaries is focused on oil exploration, as well as future development and production in Mongolia.

Stobart Group Ltd. offers freight transportation and logistics services.  The Company transports cargo by truck, operates a rail freight terminal and port facilities, and offers warehouse storage services.

Hurricane Energy plc, together with its subsidiaries, engages in the exploration of oil and gas properties in the United Kingdom. The company holds interests in Lancaster basement discovery, Whirlwind basement discovery, Lincoln basement, Typhoon basement, Warwick basement, and Strathmore sandstone discovery prospects located to the West of Shetland. It has 100% interest in 450 million barrels of 2C contingent resources. The company was formerly known as Hurricane Exploration plc and changed its name to Hurricane Energy plc in April 2013. Hurricane Energy plc was founded in 2005 and is headquartered in Godalming, the United Kingdom.

Quadrise Fuels International plc and its subsidiaries principally engage in the manufacture and marketing of emulsion fuel for use in power generation, industrial and marine diesel engines, and steam generation applications in the United Kingdom. It produces oil-in-water emulsion-based asphalts and fuels, through its MSAR technology as a substitute for conventional heavy fuel oil. Quadrise Fuels International plc was incorporated in 2004 and is based in London, the United Kingdom.

Egdon Resources PLC is an oil and gas exploration and production company.  The Group owns acreage in the United Kingdom and France.

Shell Pakistan Limited markets petroleum and petrochemical products. The Company also blends and markets different types of lubricating oils.

Pancontinental Oil & Gas NL  a petroleum (oil and gas / hydrocarbon)  exploration company with key assets in Australia, Kenya and Namibia. The Company has high-percentage interests in a range of oil and gas targets in Australia and Africa.

PT Toba Bara Sejahtra Tbk is an exploration company. The Company explores for and produces thermal coal, which is used for power generation, cement manufacturing and other general industrial applications.

Alligator Energy Ltd. is a uranium exploration company. The Company is focused on prospective, drill ready uranium targets on granted tenements in Australia's uranium province, the ARUP in the Northern Territory.

SUSCO Pcl distributes petroleum products including unleaded and regular gasoline and diesel oil through its gasoline filling stations and directly to large end-users.  Through its subsidiaries, the Company acts as an oil agent and offers marine freight transportation services.

BP Castrol K.K. distributes lubricating oil produced by BP plc.  The Company handles brake, transmission, gasoline and diesel engine oils, and radiator fluids.  BP Castrol also sells oil-related chemical products.

E.A. Technique (M) Bhd owns and operates marine vessels focusing on marine transportation and offshore storage of oil and gas, and provision of port marine services. The Company also owns a shipyard involved in shipbuilding, ship repair and minor fabrication of steel structures.

KUB Malaysia Berhad is an investment holding company. Through its subsidiaries, the Company provides information technologies and telecommunication services, and provides online and conventional education. KUB Malaysia also bottles and trades liquefied petroleum gas, operates a chain of restaurants, develops and invests in property, and provides construction services.

Talon Energy Limited is an exploration company. The Company acquires, explores, and develops properties for petroleum resources. Talon Energy serves customers in the United States.

Yanchang Petroleum International Limited and its subsidiaries is principally engaged in investments in the oil, gas and energy related business. The Company also invests in oil and gas exploration and operation, and the trading of fuel oil.

Yanchang Petroleum International (346 HK)

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)

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

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

Zephyr Energy Plc (AIM: ZPHR): Higher 1Q24 Production than We Anticipated. All Eyes on High Impact Drilling in the Paradox

1Q24 production (excluding NGL) in the Williston was 1,151 boe/d. This is 140 boe/d above our expectations and ~100 boe/d above 4Q23 production.

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Potential for helium well to be drilled mid 2024

In October 2023, Zephyr announced the acquisition of at least a 75% WI in the Salt Wash field, located ~3 miles to the south of the Paradox project.

Auctus Advisors

Zephyr Energy Plc (AIM: ZPHR): Gearing-up for the return to drilling in the Paradox

Adding our estimates of NGL production (reported in previous periods but not in 4Q23) would lead to ~1,200 boe/d (we forecasted ~1,400 boe/d).

Auctus Advisors

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