Panoro Energy ASA (OSE: PEN): Another good well in Gabon
• The second Hibiscus Ruche Phase I well has been put in production at a gross stabilized rate of ~6 mbbl/d.• This is another good well with a flow rate similar to the previous well (DHIBM-3H) announced in 1Q23. This is again at the top end of our expectations.
• The DHIBM-3H continues to flow at a rate of ~6 mbbl/d, exhibiting no decline so far.
• Net to Panoro, these two wells add ~2.1 mbbl/d production. Overall net production is close to 10 mboe/d, representing a ~50% increase compared to 1Q23 production.
• We estimate current gross production in Gabon at ~20 mbbl/d.
• Once the second gas lift compressor on the FPSO is fully operational, this will add another 3 mbbl/d gross production from the existing six Tortue wells.
• The company has re-iterated its target of achieving net production of 13 mbbl/d once the six new Hibiscus Ruche wells are online.
• The production guidance does not include any contribution from the three well drilling programme expected to start in early 4Q23 in EG.
• We re-iterate our target price of NOK50 per share.
Reflections on the other assets
We understand that the Tunisian assets are performing very well with an ongoing work programme that could unlock some production upside.
Valuation
Our ReNAV is unchanged at ~NOK50 per share. We have trimmed our Brent price assumptions for 2023 by ~US$1.5/bbl and we now forecast that Panoro will generate ~US$240 mm free cash flow in aggregate over 2023 2024. Even at Brent as low as US$75/bbl until YE24, the aggregate free cash flow over 2023-24 would be >US$170 mm, representing >50% of the current market cap.
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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