Auctus Advisers Research Note, 14 August 2024

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Production guidance for non op. assets in line. Waiting for results of well test in the Paradox

• 2Q24 production in the Williston Basin was 1,226 boe/d. This excludes natural gas liquids (historically 150-200 bbl/d). This represents an increase of 7% compared to 1Q24 but 2Q24 production from the six wells Slawson wells continues to be partially impacted by gas export infrastructure constraints.
• The FY24 production guidance for the Williston Basin has been set at 1.1-1.3 mboe/d excluding natural gas liquids. Including natural gas liquids, we estimate that this would equate to 1.25-1.5 mboe/d. This is in line with our expectations.
• The key near term newsflow is the upcoming result of the acidization and subsequent well test at the State 36-2R LNW-CC well in the Paradox Basin. The purpose of the acidization test is to further remove any drilling mud emulsion from the fracture network.
• In the event the acidization does not remove sufficient mud from the fracture network, we note that the design of the initial horizontal well was for a (up to) 10 lateral and the well could therefore be re- entered accordingly. Such a well would target a much larger area of natural fractures and have hydraulic stimulation.
• Pending the result of this second test at State 36-2R LNW-CC well, we re-iterate our target price of £0.12 per share.