Panoro Energy ASA (OSE: PEN): Production reaching 13 mbbl/d. Two high impact wells by end of 1Q25
• There were no surprises in the 3Q24 accounts.• Since last week, WI production has increased from 12.5 mbbl/d to 13 mbbl/d.
• Gross production in Gabon continues to be ~40 mbbl/d. Three further workovers for ESP installation are planned during 4Q24. The nameplate capacity of the FPSO could be increased by 10% to 44 mbbl/d.
• Gross production in EG stands at 29 mbbl/d. The second infill well is starting production and could take overall gross production in EG to 35 mbbl/d. This new well could add ~800 bbl/d net to Panoro’s 14.25% WI.
• Panoro is considering longer term sources of debt and could replace its existing RBL with a cheaper bond. With capex of only ~US$40 mm in 2025, we continue to forecast free cashflow of ~ US$120 mm in 2025. As a result, the company’s financials will be much more resilient to lower oil prices.
• We also anticipate an increase in shareholder distributions. The dividend yield for 2024 is already 6.8%. Adding 1.1% share buybacks so far in 2024 suggests at least 7.9% will be returned to shareholders in 2024.
• Results of the Akeng Deep well in EG (180 mmbbl - Panoro WI: 12%) with an unrisked NAV of ~NOK15 per share are expected by YE24 and we anticipate that the Bourbon prospect in Gabon (29 mmbbl – Panoro WI: 17.5%) with an unrisked NAV of ~NOK4 per share will be drilled in 1Q25.
• We re-iterate our target price of NOK51 per share in line with our ReNAV.
Valuation and forecast
Our Core NAV and ReNAV are respectively NOK32 per share and NOK50.5 per share.
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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