Energy Explorer Targets New Wells in Namibia's Orange Basin
Research Report

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Disclosures for Auctus Advisors, Sintana Energy Inc., December 12, 2024:

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Sintana Energy Inc. (SEI:TSX.V; SEUSF:OTCQX) has just started drilling the fourth appraisal well at its Mopane discovery in Namibia's Orange Basin, which has been prioritized by the company following success at well Mopane-1A.

"A positive result could help to firm-up the farm-out price for the block," wrote Auctus Advisors Analyst Stephane Foucaud in a December 12 updated research note. Foucaud stuck by his target price of CA$1.85 per share for the stock.

A seismic target encountered near the Mopane-1X and Mopane-2X wells about 8 kilometers to the west has already been appraised by Mopane-1A about 8 kilometers to the southwest, the analyst noted.

"The next well in the program will be the Mopane-3X exploration well to be spud in early April," he wrote. "It will target AVOs 10 and 13 that were visible on the 3-D seismic. It could add resources to Mopane."

Drilling Program Increases 'Past Cost'

Foucaud said the firm continues to believe that Sintana’s current share price reflects only the value of its interest in the Mopane discovery (PEL 83) that could be crystalized by a partial divestment process initiated by exploration license operator Galp Energia of Portugal.

"The continued drilling program increases the amount of 'past cost,' which could boost the price offered by a potential partner," the analyst wrote. "We estimate the additional un-risked value of the upcoming drilling program at PEL 83 (Galp), PEL 90 (Chevron), and PEL 87 at C$2.80/sh."

Success at the Tambotti-1X exploration well being drilled in PEL 56 could also have positive readthrough for Sintana’s PEL 90, Foucaud said.

Also, Rhino Resources/BP/Eni are expected to start drilling an exploration well at PEL 85 imminently. PEL 85 is adjacent to Sintana’s PEL 83 (Mopane) and PEL 79.