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

Serica Energy PLC explores for and extracts oil and natural gas.  The Company operates primarily in the United Kingdom and Indonesia.

<ul>
<li>2023 production to date was 43,781 boe/d. very close to our expectations of 44.3 mboe/d. </li>
<li>Production in June at the Bruce Hub of 25,771 boe/d was particularly strong following the recent Light Well Intervention Vessel campaign.</li>
<li>This partially offsets the low production in May at the Triton Hub following a trip of a compressor that shut down production for three weeks (the production at Triton has been restored since then).</li>
</ul>


2023 production to date was 43,781 boe/d. very close to our expectations of 44.3 mboe/d. 
Production in June at the Bruce Hub of 25,771 boe/d was particularly strong following the recent Light Well Intervention Vessel campaign.
This partially offsets the low production in May at the Triton Hub following a trip of a compressor that shut down production for three weeks (the production at Triton has been restored since then).


Serica Energy Plc (AIM: SQZ): Operations on Track. High Net Cash.

Valeura Energy Inc. operates as an exploration company. The Company engages in the development and production of petroleum and natural gas. Valeura Energy focuses on growing its resource base and production in the Thrace Basin in Northwest Turkey.

<ul>
<li>Production at Wassana has been suspended following the discovery of a crack within one of the MOPU’s steel jack-up legs that could pose a risk to the structural integrity of the MOPU.</li>
<li>The company is conducting further inspections and analysis to plan next steps.</li>
<li>Further visibility is expected in the coming weeks.</li>
</ul>


Production at Wassana has been suspended following the discovery of a crack within one of the MOPU’s steel jack-up legs that could pose a risk to the structural integrity of the MOPU.
The company is conducting further inspections and analysis to plan next steps.
Further visibility is expected in the coming weeks.


Valeura Energy (TSX: VLE): Operational Blip Offers an Opportunity for Investors

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.

<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>Serica Energy is a ~US800 mm market cap company with &gt;40 mboe/d production and 140 mmboe of 2P reserves in the UK North Sea.</li>
<li>The investment case is about value and generous shareholder distributions.</li>
<li>The strategy is to maximize the value of two key producing hubs, depending on the UK’s tax policy, to develop a third one at Buchan Horst and to grow via M&amp;A.</li>
</ul>


Serica Energy is a ~US800 mm market cap company with &gt;40 mboe/d production and 140 mmboe of 2P reserves in the UK North Sea.
The investment case is about value and generous shareholder distributions.
The strategy is to maximize the value of two key producing hubs, depending on the UK’s tax policy, to develop a third one at Buchan Horst and to grow via M&amp;A.


Serica Energy Plc (AIM: SQZ): Initiating Coverage

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.