SNAPSHOTThe ANS-2A sidetrack well has encountered a 6.5 m net...

SNAPSHOT

• The ANS-2A sidetrack well has encountered a 6.5 m net vertical oil column in high quality Eocene-aged sandstone reservoir.
• The reservoir quality encountered at ANS-2A is consistent with ANS-2 (porosity and permeability ~20% higher than at ANS-3). The oil-water contact was encountered very close to the top of the water wet reservoir encountered at ANS-2. Pressure data recovered from ANS-2A and the producing ANS-3 well confirms a continuous oil pool. These are two important positives.
• This is partially offset by the top of the structure being lower than expected, resulting in the net oil reservoir intersection at ANS-2A being “only” ~3 times that of ANS-3. The bull case was for ~12 m net pay, representing ~6x the net pay at ANS-3.
• The well will be tied into the adjacent Anshof permanent production facility after well completion operations expected to start early in October. Production performance will be important for assessing the impact of ANS-2A on reserves. The company is also planning to remap the field in the next 2-3 months to determine an optimal location for the next appraisal / development well. Incremental appraisal drilling will be required.
• ANS-2A is expected to be in commercial production at Ansfof by the the end of October, adding 200-300 bbl/d (gross) to existing (110 bbl/d) production from ANS-3. The additional production would allow the company to have consistent positive operating cashflow. We are now assuming that ANS-1 will be drilled in 2H25 rather than 1H25.
• Pending the result of the ANS-2A well test and further visibility on the reserves at Anshof, we re-iterate our target price of A$0.75/sh in line with our ReNAV. Our target price represents 7.5x the current share price.

Upcomingnewsflow

In addition totesting ANS-2A, the LICHT-1 prospect will be drilled in October (unrisked NAVof~A$0.04 per share). The Welchau-1 well is due to be tested during the winterperiod from October 2024 to March 2025. (unrisked NAV of ~A$1.10 per share). Anupdated resources estimate reflecting the recent drilling result is expectedbefore the beginning of the well test.

Valuation

The current sharepricebroadly reflects our valuation for the company based on its 2P reservesonly(~A$0.10 per share). Our ReNAV is A$0.73 per share. We are not carryinganyvalue for Italy yet where the company holds ~19-66 mmbbl contingentresourcesand 40-201 mmboe prospective resource