Meren Energy Inc. (MER.TO) has reported its Q2 2025 results, with production in line with forecasts and updated guidance pointing towards the upper end of expectations. Stifel maintains its valuation at C$3.20 per share, based on a long-term Brent price of US$70 per barrel. The period saw steady operational progress, including new well activity at Egina and Akpo, while work continues on key projects in Nigeria, Namibia, and Equatorial Guinea.
DirectorsTalk caught up with David Round, Research Analyst at Stifel to discuss the latest update.
1. David, how did Meren perform in terms of production during Q2/25?
The company delivered a working interest production average of 30.9 kboepd, exactly in line with our forecast, and entitlement production averaged 35.7 kboepd, which was just below the 36.5 kboepd Stifel had expected.
2. Has the company changed its 2025 production guidance?
Yes, the working interest production guidance has been tightened to 30–33 kboepd, up from the previous 28–33 range. Entitlement production guidance has also been raised to 34.5–37.5 kboepd from 32–37, with a slightly higher proportion of gas in the mix.
3. What valuation is Stifel currently placing on Meren?
Stifel’s net asset value remains at C$3.20 per share, based on a long-term Brent oil price assumption of US$70 per barrel.
4. What did cash flow from operations look like this quarter?
With one cargo sold at an average price of US$64.2 per barrel, cash flow from operations before working capital came in at US$178 million, very close to Stifel’s US$181 million forecast.
5. Were there any notable developments at the Egina and Akpo fields?
Yes. Two new Egina wells were brought on stream in May and are performing in line with expectations. In addition, a well intervention at Akpo was completed successfully.
6. Have there been any changes to cash flow or capital spending plans for 2025?
Cash flow from operations is now expected to be between US$260 million and US$310 million, lower than the earlier US$320 million to US$370 million guidance due to reduced price assumptions. Capital expenditure is now forecast at US$100 million to US$140 million, down from US$150 million to US$190 million.
7. What’s happening with the Akpo/Egina drilling programme?
The planned break in drilling has been moved forward to Q3 2025 from Q4. Drilling is expected to resume in 2026, targeting the Akpo Far East near-field prospect, estimated to hold 144 million barrels of oil equivalent, along with further development wells on both Akpo and Egina.
8. Has there been any update on the Preowei field?
Joint venture partners are continuing to optimise the field, and a new review of seismic data suggests there could be more recoverable resources than previously thought.
9. What progress is being made in Equatorial Guinea?
Meren remains in active talks with industry players about farming out both of its blocks. The company aims to complete the current data room process by the end of Q3 2025.
10. How does Stifel view Meren’s overall asset base and growth potential?
Stifel describes Meren as having a portfolio of high-quality production assets, along with highly sought-after and potentially world-class development projects, such as the Venus discovery in Namibia.
Meren Energy Inc. is a full-cycle Independent upstream oil and gas company with interests offshore Nigeria, Namibia, South Africa and Equatorial Guinea. Its main assets are producing and development assets in deepwater Nigeria operated by Majors. The Company holds a leading position in the Orange Basin including its effective interest in the Venus light oil project, offshore Namibia, and its direct interest in Block 3B/4B, offshore South Africa.
