Southern Energy Corp. (SOUTF:OTCMKTS) is meeting production expectations so far this year and is on track for well development that could add more value to the company.
In an April 18, 2023 research report, Stephane Foucaud of Auctus Advisors reported that Q123 gas production within the company had held well. He writes, "The business continues to be resilient in the current environment of low gas prices. Higher gas prices would unlock material value and allow the company to return to growth."
Review of Results
Foucaud presented the key points of Southern Energy's latest reports.
The company has multiple catalysts coming up in 2023, including the anticipated completion of the 18-10 #3 Upper Selma Chalk well in the late second quarter of this year. Its 18-10 #1 City Bank well is on track to produce peak gas rates around the end of 2Q23 due to its current flowback of injected fluid reaching 9%. If it reaches closer to 20%, its success could add reserves to Southern Energy's assets.
"This could allow the company to take advantage of depressed gas asset value to make bold-on acquisitions and benefit from a likely gas price rally later in 2023," writes Foucaud, regarding Souther's US$23 million of unused capacity on its credit facility.
Structure and Predictions
The company's current valuations remain unchanged by Auctus Advisors.
The research report states, "Our Core NAV and ReNAV are unchanged at respectively £0.74 per share and£1.49 per share. This represents respectively 3.5x and 7x the current share price."
Foucaud's research report shares recent rating and target price information as well as current market data on the company:
- Price Target: £1.50
- Implied Total Return: 689%
- Total Shares Diluted: 180 million
- Market Cap: US$41 million.
Current shares are trading at £0.19 per share.
Thor Explorations has 641.9 million basic shares outstanding and 669.5 million fully diluted shares outstanding. The company's cash reserves are CA$2.5 million. By the end of Q1 2023, the company had reduced its debt outstanding to CA$27.9 million.
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Disclosures for Auctus Advisors, Southern Energy Corp., April 18, 2023
Southern Energy (“Southern” or the “Company”) is a corporate client of Auctus Advisors LLP (“Auctus”). Auctus receives, and has received in the past 12 months, compensation for providing corporate broking and/or investment banking services to the Company, including the publication and dissemination of marketing material from time to time. MiFID II Disclosures This document, being paid for by a corporate issuer, is believed by Auctus to be an ‘acceptable minor non-monetary benefit’ as set out in Article 12 (3) of the Commission Delegated Act C(2016) 2031 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. It is produced solely in support of our corporate broking and corporate finance business. Auctus does not offer a secondary execution service in the UK. This note is a marketing communication and NOT independent research. As such, it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and this note is NOT subject to the prohibition on dealing ahead of the dissemination of investment research. Author The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus. Not an offer to buy or sell Under no circumstances is this note to be construed to be an offer to buy or sell or deal in any security and/or derivative instruments. It is not an initiation or an inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000. Note prepared in good faith and in reliance on publicly available information Comments made in this note have been arrived at in good faith and are based, at least in part, on current public information that Auctus considers reliable, but which it does not represent to be accurate or complete, and it should not be relied on as such. The information, opinions, forecasts and estimates contained in this document are current as of the date of this document and are subject to change without prior notification. No representation or warranty either actual or implied is made as to the accuracy, precision, completeness or correctness of the statements, opinions and judgements contained in this document. Auctus’ and related interests The persons who produced this note may be partners, employees and/or associates of Auctus. Auctus and/or its employees and/or partners and associates may or may not hold shares, warrants, options, other derivative instruments or other financial interests in the Company and reserve the right to acquire, hold or dispose of such positions in the future and without prior notification to the Company or any other person. Information purposes only This document is intended to be for background information purposes only and should be treated as such. This note is furnished on the basis and understanding that Auctus is under no responsibility or liability whatsoever in respect thereof, whether to the Company or any other person. Investment Risk Warning The value of any potential investment made in relation to companies mentioned in this document may rise or fall and sums realised may be less than those originally invested. Any reference to past performance should not be construed as being a guide to future performance. Investment in small companies, and especially upstream oil & gas companies, carries a high degree of risk and investment in the companies or commodities mentioned in this document may be affected by related currency variations. Changes in the pricing of related currencies and or commodities mentioned in this document may have an adverse effect on the value, price or income of the investment. 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Disclaimer This note has been forwarded to you solely for information purposes only and should not be considered as an offer or solicitation of an offer to sell, buy or subscribe to any securities or any derivative instrument or any other rights pertaining thereto (“financial instruments”). This note is intended for use by professional and business investors only. This note may not be reproduced without the prior written consent of Auctus. The information and opinions expressed in this note have been compiled from sources believed to be reliable but, neither Auctus, nor any of its partners, officers, or employees accept liability from any loss arising from the use hereof or makes any representations as to its accuracy and completeness. Any opinions, forecasts or estimates herein constitute a judgement as at the date of this note. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied is made regarding future performance. This information is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company and its subsidiaries. Auctus is not agreeing to nor is it required to update the opinions, forecasts or estimates contained herein. The value of any securities or financial instruments mentioned in this note can fall as well as rise. Foreign currency denominated securities and financial instruments are subject to fluctuations in exchange rates that may have a positive or adverse effect on the value, price or income of such securities or financial instruments. 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Auctus may, from time to time, provide or solicit investment banking or other financial services to, for or from the Company or any other company referred to herein. Auctus (or its partners, officers or employees) may, to the extent permitted by law, act upon or use the information or opinions presented herein, or research or analysis on which they are based prior to the material being published.
