Panoro Energy ASA (OSE: PEN): Potential resources addition in EG, reducing costs in Gabon
• 1Q25 production of ~12 mbbl/d and net debt at the end of March had been previously disclosed.• The company has reaffirmed its FY25 production guidance of 11–13 mbbl/d but has raised its expected capex for 2025 from US$35 mm to US$40 mm. This increase reflects additional spending to appraise the Bourdon discovery.
• Panoro has initiated an audit of 112 mmboe WI 2C resources on Block EG-23, offshore Equatorial Guinea, in 50–100 metres of water depth. Some of these resources, estimated by the Ministry of Mines and Hydrocarbons, could be incorporated into the YE25 resources statement. The company is also assessing whether any of the seven discoveries (four oil, two gas, and one gas/condensate, some of which have been tested) could be candidates for early development.
• In Gabon, BW Energy has assumed take over operations of the FPSO BW Adolo starting November 2025. Since BW Energy is the operator of the Dussafu hub, this transition is expected to create synergies and efficiencies, leading to lower opex in 2026. These potential savings have not yet been incorporated into our forecasts.
• WI production in Tunisia has now reached ~1750 bbl/d net to Panoro’s WI following the addition of the El Ain-3 well that was brought on-line at ~200 bbl/d (gross) following a work-over. 1Q25 WI production was 1,492 bbl/d.
• Panoro is now projected to generate ~US$55 mm in free cash flow in 2025. This compares with potential shareholder returns of up to US$45 mm through dividends and share buybacks, representing a total yield of ~19%.
• We re-iterate our target price of NOK49 per share.
Valuation
Our Core NAV and ReNAV are now NOK39 per share and NOK49 per share respectively. Our capex forecast from 2026 onwards does not account for exploration spending. We estimate that the aggregate Free Cash Flow from 2025 to 2028 will be equivalent to ~120% of the current market cap. Even with additional exploration expenditures, there remains ample capacity to support future shareholder distributions.
Panoro Energy is an international independent oil and gas company engaged in the exploration and production of oil and gas resources in Brazil and West Africa. In Brazil, Co. participates in a number of oil and gas licenses located in the Santos basin outside the south-east coast of Brazil and in the Camamu-Almada basin in the state of Bahia. In West Africa, Co. participates in a number of licences in Nigeria and Gabon. As of Dec 31 2013, Co.'s commercial production is from the Manati field in Brazil.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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