Keep Your Eye on This Oil Co in Q1
Research Report

In a February 6 report on Sweden-based Tethys Oil AB (TETY:SSE;TETY:STO), Auctus Advisors analyst Stephane Foucaud maintained a bullish stance with a SEK100 price target.

Foucaud remained focused on the potential of Block 56, stating, "all eyes on Block 56" as the company pursues a strategic review that could unlock significant value. The outcome is expected in Q1 2024.

While Q4 2023 results beat expectations, with cash of US$25.8 million topping Auctus' US$22.2 million forecast, the key development was higher-than-expected 2024 capex guidance of US$90-94 million.

As Foucaud details, "This is above our forecasts of US$70 mm that incorporated only US$10 mm of exploration and appraisal capex on Block 56 and Block 58." Instead, Tethys will invest US$26.5 million across its Oman blocks, including US$18.5 million on Block 58, where two exploration wells will be drilled versus the one Auctus modeled.

However, the "exact size of the development will depend on the well test results at Menna-1 and Sarha3."

Tethys also secured a US$60 million term loan to support these plans. In Foucaud's view, "Block 56 is a key area for production and reserves growth in 2024."

Beyond Block 56, Foucoud pointed to the Kunooz exploration well on Block 58, targeting 123 million barrels as high-impact. Foucaud reiterated the SEK100 target and bullish stance: "Given the high level of activities in 2024, Tethys' profile is increasingly about growth. Pending the well test results at Menna-1 and Sarha-3, we re-iterate our target price of SEK100/sh," he said.

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Disclosures for Auctus Advisors, Tethys Oil AB, February 6, 2024

Tethys Oil AB (“Tethys” 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.

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Author The research analyst who prepared this research report was Stephane Foucaud, a partner of Auctus.

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