Earnings Call - SONO GROUP NV

Welcome back, everyone. Next, we have Stamper Oil and Gas Corp. It trades on the TSXV under the ticker STMP and the OTC under STMGF. It's an offshore Namibia-focused oil and gas exploration company with ownership interests across five offshore exploration blocks, covering four petroleum exploration licenses in the Orange, Walvis, and Luderitz basins. Happy to welcome its CEO, Grayson Anderson. Welcome to the conference today. We're very much looking forward to hearing your presentation. Thank you for having us, Anna, and welcome everybody to Emerging Growth Conference 97. It's a conference where companies I've been with in the past have presented, and it's a great platform for a combination of family office, high net worth, and institutional investors to join us today to hear the Stamper story. As Anna noted, we provide leveraged exposure to Namibia's next offshore oil and gas exploration discoveries. It's been four years of significant exploration discoveries from supermajors offshore Namibian. We'll go through that in a minute. First of all, I would like to direct everybody's attention to our forward-looking statements. Basically, nothing should be relied on that is said during this presentation when making investment decisions, and that information can change beyond this state, and everybody's reminded to look at our risk factors in our filing disclosures on CDAR+, which is the Canadian regulatory body. So why Stamper? Why now? As I said, there's been a number of major exploration discoveries offshore Namibia in the last four years, and then there's a new wave of exploration activity happening in NamibIA right now. In the next several weeks, we're going to see three deepwater drilling rigs mobilize offshore NamibiA to drill exploration and appraisal wells in the Orange Basin adjacent to our Pell 107. And then we also have Pell 98 in the Luteritz Basin and two Pells in the Walvis Basin, Pell 108 and Pell106. So we have a strategic advantage in that every single one of the Pells that we have is adjacent to or surrounded by other supermajors. Down in the Orange Basin, we are adjacent to Chevron. And just to the south of us, you have Total Energies with the Venus Discovery, which is expected to go to final investment decision in the coming months. In the Luteritz Basin we're right next to Pell 102 is right next to PELL 104, which is acquired this year by Total Enerdies and Petrobras. And then up in the Walvis Basin, we have Chevron and BP surrounding our blocks. So we're in the right postcode, we're on the right jurisdiction for material hydrocarbon discoveries. The great thing about Stamper as well is that we have a mix of working interests, whereby we're responsible for our own share of costs, which is the case on Pell 107. But we also have three carried interests on the other three PELs that we have. So that provides significant, a differentiating factor to other people, because on carried interests, you don't require additional capital. There's another way to sort of dissect and think about our portfolio. Two of our PELS, PEL 107 and PEL106, are in the deep water. Those are blocks that ultimately should be in the hands of supermajors. And we're working on the technical side of things and our partners so that supermajors can come in and partner with us to drill high-impact exploration blocks on Pell 107 and 106. We also have two shallow water blocks. Those are Pells that we can potentially work up ourselves from a technical perspective or eventually drill ourselves. But the other important characteristic of the shallow water PELs in PEL 98 and PEL 102 is that you don't have to have super major capital here. These wells can be drilled much cheaper, sort of in the $20 million to $30 million range, and that opens up a much larger inventory of potential partners there as well. So the other thing that I would like to highlight from this slide is that with a portfolio of four PELs, we have multiple shots on target, which de-risks the exploration opportunity from an investor's perspective. You'd never want to just have one exploration license. You need to have multiple opportunities, multiple shots. Because ultimately, over the long term, exploration is a statistical exercise. Finally, you can see from the size of these PELs, they're very large. Each one of these PLs is equivalent to about between 230 and 250 Gulf of Mexico exploration blocks. So these are very large, which, again, creates a huge opportunity for companies that want to partner with us. They're very larger, and they're Very Perspective. some of the things that i noted earlier was that there are three three deep water drilling rigs coming to namibia right now or either or are in country you can see from the upcoming uh this this sort of timeline slide that you've got chevron total energies and shell all drilling in the in the coming starting drilling in thecoming weeks the most important one for Stamper is on Pell 90, where Chevron will be drilling the Naba 1X with the Stena 4th drilling rig. It's on its way down the coast of Africa right now, so it should be starting drilling in the coming weeks. You also have Shell drilling with the Стена Drillmax. They'll be drilling a two-well campaign, one appraisal well of their Merlin 1X Discovery well, which was earlier this year. And then they will also be drilling an exploration well after that. And finally, Total Energies has the Tungsten Explorer. It's a drill ship that they own in-country right now, drilling several appraisal and potentially exploration wells on the Mopan discovery, which they have in partnership with GELP, who made the original discoveries a couple of years ago. Additionally, up in the Walvis Basin, you have BP, who entered Namibia this year, acquiring a significant amount of seismic over the three petroleum exploration licenses they acquired this year, 97, 99, and 100. All three of those PELs are adjacent to or next to our PEL 106 up in the Walvis Basin. It's our view that over time, although all the discoveries to date have been in the Orange Basin, we believe that from a geologic modeling perspective, the quality of the reservoirs and potential for highly productive light oil reservoirs will be up in the Walvis Basin. So although the Orange Basin gets all the attention today, over the longer term, we believe the Walris Basin will ultimately be more prospective than the Orangebasin for light oil discoveries. Namibia is a great country. Not a lot of people really know where it is without uh really knowing about it um it sits just above uh it sits just above south africa on the continent of africa we have all almost all the super majors are there in the past year we've seen the entry of petrobras the brazilian state oil company we've seen the country of bp up in the walvis basin all around us and we've seeing equinor enter pell 90 with chevron Again, that's the Pell that's right next to ours in the Orange Basin. You already had incumbent supermajors there like Shell, Chevron, Exxon, and Total Energies. And you also had exploration discoveries in less deep water from Rhino Resources back in 2025. So it's a great jurisdiction. it's a combination of of tax and royalty scheme with the state-owned oil company namcor having a stake in every block as well it's an oil company that's very similar to to norway in that you know you've got a state- owned oil company in namcor involved in every single pell you've got a tax and loyalty scheme the greatest thing about this this structure though is that it's very well balanced for both the operators and the government. As exploration costs are fully deductible for tax purposes, meaning that there's an incentive for people to come here and drill exploration wells and find new oil and gas reserves because the economics work. Over the life of a project, about 50% will go to the government, about 60% will end up staying with the contractors. That puts Namibia pretty much bang in the middle of every country in the world in terms of government take versus economic incentive for producers. Here's our capital structure. It's fairly simple. We have a large insider ownership, about 20%. So we all have skin in the game. We have some warrants that are both in the money and some warrints that are deep out of the money. And then we have some RSUs and stock options as well. We raised about $13.5 million last year to complete the acquisition of these PELs. And it's a very simple capital structure. We've got about $200,000 of debt as well, just for some running costs. So very simple capital structure. Right now, our valuation is absurdly low from our perspective. When we did this transaction originally, we were expecting a valuation around $20 million. The share price performance in the past year has been a little bit disappointing, but that's because the industry is going through some change in Namibia right now, and all of the activity that we're about to see in the coming weeks was activity that мы were expecting to have happen six or eight months ago. So it's been a little slower than the market expected, which is why the performance has been the way it is, but it's now when things are expected to turn around. We have a great team with Stamper. There's myself and Kevin Ma, the CEO and CFO. We also have Aaron Haladilu, who is our in-country country manager, and then Dean Clemenson, Jerry Jarvis, and Anne Skarbanky, who provide our technical evaluation of our assets. These are proven oil finders that have worked all over the world, discovering large onshore and offshore discoveries. Anne Skarsbanky is the former head of geology at the University of Namibia, so he understands Namibian geology as well or better than most. Jerry Jarviss, historically with Tullow and when they were going through the period of time where they were making all of their exploration discoveries. And Dean Clementson, as I said, worked all over the world making major discoveries in Southeast Asia offshore, as well as working Algeria over the course of a very long career. Our board, again, significant capital markets and Namibia experience. Matt Goldsmith is our chairman. He owns about 8% of the company. Joseph Ita is a a Namibian delegate and, again, former public servant who's very well-respected in-country. And then we've got capital markets and legal expertise from Chris Cooper, Des Balakrishnan, and Simon Ackett. So, Stamper, five blocks, four petroleum exploration licenses surrounded by supermajors. You can see in the orange blocks in our map here, where we were up and down the coast in three of the four basins so we've got every jurisdiction and all the geology covered we're adjacent to super majors who are active and busy you will you're going to see that with success adjacent to us it de-risks our acreage significantly again we've got five exploration blocks in each of the walvis the orange and the luteritz basin up and down the coast adjacent to all the super majors pel 107 is in the orange basin it's adjacent to the upcoming naba 1x well from chevron on pel 90 it it's a block that's very large and in the deep water, and ultimately will be looking for a super major partner on this block. It shares some of the same geological characteristics that we've seen from the Venus discovery and other orange basin discoveries from Rhino Resources and Galp and now Total Energies. All of our PELs have at least a minimum of four additional years on them from a licensing perspective. All of our four PELs are in their initial exploration period. So all of our PELS, again, have somewhere between four and six years of additional time on those. So there's lots of duration here. PEL 107, we have a 32.9% indirect working interest as a shareholder of West Oil, who's a 70% working interest owner and the operator. PELL 106 up in the Walvis Basin, Our second deepwater block, this is our most technically advanced PEL. This PEL has over 2,000 kilometres of 3D seismic, over 1,000 kilometres of additional 2D seismics, has legacy unrisked resources of over a billion barrels from the operator, who's Oranto Petroleum. Again, this a PEL that has already a licence in place for additional environmental uh sorry it has environmental impact assessment approval for additional 3d seismic this is a pell where we would expect to see the first major uh super major come into it has uh it has it's adjacent to pell 82 where chevron is expected to drill the first walrus basin exploration well in in the past decade so that's expected in 2027 again as i noted earlier we believe ultimately the walrus base and it's going to be the most perspective basin for namibia uh as as we move forward pell 98 had a uh it's a shallow water block as noted before lambda energy acquired this earlier this year from echo atlantic they're now proposing an additional work plan so that we move into the first renewal exploration period for two years and then a further uh exploration period as well after that of two years this is a pell that has a lot of 2d seismic on it it has a well that was drilled by ranger oil back in the 90s And again, it's quite perspective, given some of the legacy wells that we've seen drilled in the region. We've seen some additional farming activity around this Pell this year with BP entering. We also saw Santana enter in Pell 37, which is adjacent to Pell 98, paying $6.5 million U.S. dollars to enter this PELL. If you recall, our valuation is only $7 million right now. So, you know, this is a carried interest for 5%, and someone was willing to pay $6.5 million for a working interest next door. So, again, from a valuation perspective, these carried interests that we have in the Walvis Basin are very, very valuable. The Luteritz Basin, again, that saw joint venture activity coming into us this year next to us, with Total and Petrobras acquiring Pell 104 next to us in February of 2026. This is a Pell where NAMCOR is the operator. We've been working with them since we acquired the Pell a year ago to try and get a farm out process initiated. They have a very good process in place, and we'll be working with them to progress that further in the coming months. This is in the Luderitz Basin, just north of the Orange Basin. And again, we see some really high quality geological features on this block that we think ultimately would be great to either drill with our partner NAMCOR or to bring in another party as well. Wells on this Pell would only cost about $20 million. So again, it's in a great jurisdiction. We think it's very prospective. And again, It's a carried interest here. So it's something that we're very much looking forward to progressing as we go further with NAMICOR. this is what i really want to drive home here is that you know stamper is significantly undervalued relative to every other uh namibian namibia public company you've got echo atlantic and centana which have executed farm out agreements and in centana's case successful exploration drilling trading it you know 10 to 20 times what we currently trade at actually multiples of that historically acreage offshore namibia has traded at between five and ten million dollars u.s per pell that was the logic and the thinking of what the valuation and the valuation that was assumed when the transaction to acquire the pells last year was done we've seen a sell-off in the last year in our share price but again with us being able to execute a farm out agreement or a transaction on Pell 106 or Pell107, you would see a significant re-rating in our stock, as you've seen with Echo Atlantic and Santana in the past, and Pancontinental, who historically had a joint venture with Woodside, even though that joint venture is terminated. Pancontinental still trades at a premium, a significant premium, given they only have one Pell, whereas we have four. this is this is the centana model and and you know basically what it shows is that while activity happens around you the potential for the share price to double is there you don't have to necessarily execute significant activity on your blocks in order for share price performance to happen what you really want to have happened over over a medium term period is a re-rating that comes with getting farm-out joint ventures done, drilling campaigns executed on your PELs, and ultimately drilling success. And we saw this with Santana. It had a significant re- rating when it had a farm- out transaction with Chevron. It had a significant rerating when drilling activity started, and then it had another significant re-rating when exploration success happened. So this is the business plan. This is the model. It's a proven model. It's worked before, and we expect it to work again. So to summarize, you know, Stamper, we've got five blocks covering four PELs in three of the four basins offshore Namibia. We've got PEL 107, which has the NABA 1X well drilling next to it on PEL 90 from Chevron. We have additional drilling activity happening from Total Energies and Shell. Again, these are wells that when they come in, they confirm our geologic model. And then we've got catalysts coming specifically for Stamper in that we're looking to get farm-out transactions completed on both PEL 106 and PEL107 in our deepwater blocks. Additionally, we'll be working with our partners to either look at farming out our shallower water blocks or to look to implement our own exploration campaigns on those blocks. so that's that's some stamper in a nutshell i'd now like to uh open up the presentation to some questions um thanks anna all right questions there we sure do thank you so much all right so uh chevron expects to drill the naba 1x exploration well before the end of 26 on PEL 90 immediately adjacent to your PEL 107. So what geological similarities exist between those blocks and what specific results from Chevron's well would be most meaningful for the value of Stamper's acreage? So the NAVA 1X well is going to be drilled more to the northern part of that PEL, so relatively close to where we are. And again, And the southern part of Pell 107 shares a lot of the same geological play types that we've seen throughout the Orange Basin. Basically, what we've seeing is there's two or three different play types that people are chasing there. And we believe at least two of those sit on Pell107. We've seen successes from rhino resources. Total with Venus is an analog for sure. And because of those successes, we think that there's a really high chance for NABA to have success as well. And one of the other things that's important is that Chevron has basically recruited a lot of the exploration team that was at Total Energies and drilled the Venus well. So there's been a huge knowledge shift and knowledge sharing within the industry that we think ultimately will deliver really high-rate exploration success on the wells that are planned from all the industry participants. And are you expecting to see any more super majors to enter Namibia in 2026 or 2027? Well, we've seen three enter this year in BP. We've seen three enter the BP, Petrobras and Equinor, the Norwegian company. Again, Equinore has come in to to Pell 90 with Chevron. So, you know, that's very encouraging that another supermajor looked at all the technical information and they see what, you Know, other parts of the industry are seeing and that Namibia is the hottest jurisdiction for offshore oil and gas exploration right now. Now that Guyana is sort of in production mode and you're not seeing a lot of new exploration, NamibIA is the hottest exploration market there is. We would expect there to be potentially two or three more large national oil companies or supermajors looking at getting into Namibия. You know, we've seen or heard of potentially E&I doing a similar thing to what BP did in terms of having acreage outside of their partnership that they have in Namibia with Azule. And then the other thing that we're expecting to see is incumbents in Namibia, like Shell and Exxon and others who have one or two PELs, growing their portfolio there. As more wells are drilled and geological understanding gets better and things become more de-risked, they'll look to acquire additional acreage. And so you've got new entrants plus incumbents adding to their existing portfolio. And you saw that this year as well with Total. Not only did they, you know, not only did they add acreage with Petrobras at Pell 104 up in the Luteritz Basin, but it shows that they're creeping more northerly as well. So you saw BP enter as well up in The Walvis Basin and them and Chevron are going to be leading the charge there in terms of the exploration activity for The Walrus Basin. And you stated that attracting larger exploration partners is a priority. So if a major oil company agreed to finance seismic work and exploratory drilling on PEL 107. Talk about what percentage of Stamper's current 32.9% in direct working interest would you realistically expect to retain? So we'll use a model similar to that sort of used offshore Namibia by others in that, you know, supermajors want to come in and they want to have a material stake, you You know, so what ultimately right now for Pell 107, you've got West Oil with 70%, you've got NAMCOR with 15, you got VENA with 15%. Ultimately, at the end of the day, post a farm out transaction, you can look at something like the supermajor having, you know, the super major, maybe one or two supermajors having 70%, and then the remaining three or four partners having 5% and 10% interests. So it's making up the remaining 30%. And in exchange for that, we'd be carried. We'd then turn that working interest into a carried interest and then get carried through to production as we are on our other PELs. And which one of your PELS do you think has the potential to get traction transacted on first? So Pell 106 right now is the one that has the most technical information on it. It also has an approved environmental impact assessment for additional 3D seismic acquisition. So PELL 106 is a Pell where should a supermajor be interested, they could come in, get a stake before the end of this year, get seismic acquired in this uh this weather window for for offshore activity for namibia which generally lasts between sort of november and and and may june um and and then look to be drilling in 2020 uh 2028 uh early late 27 early 28 even if if you got the seismic acquired in sort of the first or second quarter of 2027 so pell 106 is certainly the one that that we believe will um will have the potential to get transacted on first, but there's also potential for Pell 107. I think the shallow water blocks, we're still kind of in the decision-making process with our partners as to whether we want to do it ourselves or whether we wanna bring in partners. And do you have any interest in contacting Gil Holtzman and discussing a JV with him and BP? Gil's done a great job in getting his assets farmed out this year. Listen, the stock's up 600% this year or in the past year, given he was able to farm out everything in his portfolio, he did a great job there. So I think for right now, I think they're looking more at, at just retaining what they have, maybe, maybe expanding their portfolio a little bit. But I think, for right now, given we have carried interest, we're happy with what we have. And I think Echo Atlantic is basically a story that we're looking to replicate and emulate. Perfect. Well, Grayson, thank you so much for joining us on our conference. We certainly want to follow along with all your progress at the end of this year and into the new year. Thank you, Anna, and thank you, everybody, for joining us today. If you require any additional information, you can email us at admin at stampernamibia.com or visit our website at stampertnamibianam.com, and And we'll get in touch with you that way. Thank you, everyone, again, for joining. Have a great rest of your day. Thank you everyone. We'll be right back with our next presenter.