Oil & Gas Producer Gets Down Cost to Drill, Complete Well
Research Report

Source: Stephane Foucaud (6/1/23)

Despite this progress, the Canadian firm will likely wait for the Henry Hub gas price to rebound before continuing its well work, noted an Auctus Advisors report.

Southern Energy Corp. (SOU:TSX; SOUTF:OTCMKTS; SOUC:AIM) lowered its well drilling and completion costs, but to return to growth it still needs the Henry Hub gas price over US$3 per thousand cubic foot (US$3/Mcf), reported Auctus Advisors analyst Stephane Foucaud in a May 30 research note. The Canadian oil and gas producer can hold off until the price reaches this point.

"With available undrawn credit facilities of about US$14.5 million (US$14.5M) and corporate cash flow break-even of about US$1.80-1.90/Mcf (Henry Hub), the company is well positioned to wait for a rebound in gas prices," Foucaud wrote.

Possible 567% gain

Auctus maintained its target price of £1.60 per share on Southern Energy, currently trading at about £0.24 per share. The difference between these two prices implies a large, potential return for investors of 567%.

Well costs reduced

Southern has four already-drilled wells ready for completion: two Lower Selma Chalk laterals, one City Bank lateral and one Upper Selma Chalk lateral, Foucaud relayed. Now, after having effected cost efficiencies, it will run the company about US$3.4M to complete each well..

As such, it is expected Southern will hold off until the Henry Hub gas price, currently about US$2.25/Mcf, exceeds US$3/Mcf, purported Foucaud. Completion is now forecasted for potentially Q4/23.

"The acquisition of the Gwinville assets from PetroTx has provided Southern with additional access to the Florida Gas Transmission System that provides access to a market with much higher gas price premium than achieved by Southern in the past," Foucaud pointed out.

First quarter in brief

Also in his report, Foucaud noted that during Q1/23, Southern produced 2,607 barrels of oil equivalent per day, as expected.

As of quarter's end, March 31, 2023, the energy company had about US$12M of cash and $19M of net debt, including working capital.

Want to be the first to know about interesting Oil & Gas - Exploration & Production investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.

What Two Experts Said About Oil Co. Prior to New Leadership
Source: Streetwise Reports (06/01/2023)

Recently, Tag Oil Ltd. announced the appointment of a new leadership team for its operations in Egypt. Read to see who is on the team, what catalysts the company has, and what two experts have said about Tag.

The Energy Transition and Three Stocks That Will Ride This Wave in Different Ways
Source: Ron Struthers (05/30/2023)

Ron Struthers believes the Biden Administration and others promoting climate change and an energy transition could cause some surprising effects, and these three stocks can benefit in three unique ways compared to each other.

YTD Report on Oil Co. Positive
Source: Stephane Foucaud (05/30/2023)

The highlight is the performance of two new wells, each in a different country, during this period, noted an Auctus Advisors report.

Canadian Energy Co. Gains Flexibility With Finances
Source: Bill Newman (05/26/2023)

Having just completed a recapitalization, this Alberta-based oil and gas firm is "focused on unlocking significant value," noted a Research Capital Corp. report.

Positive Nat Gas Well Test Good Sign For Surrounding Area
Source: Bill Newman (05/25/2023)

The success of this one well in Colombia has the Canadian operator testing additional nearby locations that may boost production, noted a Research Capital Corp. report.