Source: Stephane Foucaud
March 23, 2023 (Investorideas.com Newswire) To reflect this accretive transaction, Auctus Advisors raised its target price on the Canadian energy producer, noted the advisory firm in a report.
Valeura Energy Inc. (VLE:TSX; PNWRF:OTCMKTS) agreed to acquire, for 9.5 million Valeura shares, the remaining 12.5% minority interest in its special purchase vehicle subsidiary company, Valeura Energy Asia, which holds its Thailand assets, reported Auctus Advisors analyst Stephane Foucaud in a March 21 research note. Accordingly, Auctus raised its target price on the Canadian oil and gas company.
"This is a very accretive transaction that increases production, cash flow, and reserves in Thailand by 14.3%," Foucaud wrote. "It also simplifies the capital structure and the understanding of the cash flow net to Valeura."
Notable Return on Investment
Auctus' new target price on Valeura is CA$5.20, up from CA$4.70. This figure implies a potential 112% return for investors from Valeura's current price of CA$2.45 per share.
"The shares continue to offer deep value, production, and cash flow growth and reserves upside," Foucaud commented.
Oil Production Imminent
In other news, reported Foucaud, the MT Jaka Tarub crude oil storage vessel departed and is en route to the Wassana oil field in the Gulf of Thailand.
The tanker is due to arrive in the next few days, after which oil production there is slated to restart.
Cash Flow Estimates Increased
Auctus revised its year-end 2024 (YE24) net cash forecasts such that they take into account the Rossukon asset, noted Foucard. Using a Brent price of US$91 per barrel, the year-end 2023 (YE23) estimate is US$240 million (US$240M), increasing to US$450M for YE24 using a US$92 per barrel Brent price.
Using a Brent price of US$70 per barrel, Auctus' YE23 net cash projection is US$145, increasing to US$275M for FY24.
Foucaud pointed out that "the magnitude of future cash generation creates the opportunity for potential shareholder distributions."
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Disclosures For Auctus Advisors, Valeura Energy Inc., March 21, 2023
Valeura Energy inc ("Valeura" 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.
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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.
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