Panoro Energy ASA (OSE: PEN): Discovery at Hibiscus South
• The DHBSM-1 exploration well at Hibiscus South has encountered 6-7 mmbbl recoverable resources (16 mmbbl in place). Net to Panoro’s 17.5% WI, this represents an addition of ~1 mmbbl.• The well intersected ~20 metres of net oil pay in the Gamba formation which is productive at the Tortue and Hibiscus fields elsewhere on the block.
• The well will be completed and put in production in early 2024.
• Panoro will now drill another production well.
• The Hibiscus South discovery showcases the optionality and resources depth at the Dussafu licences where Panoro hold a core development asset and multiple exploration targets. Overall, we estimate that the remaining mapped prospects represent a total of ~37 mmbbl prospective resources net to Panoro.
• There are options for two further drilling slots at Dussafu that we expect will be exercised once the initial six well campaign is completed.
• With more exploration activity expected in 2024, we re-iterate our target price of NOK50 per share.
Equatorial Guinea
Kosmos Energy reported 3Q23 gross production of 25.4 mbbl/d in Equatorial Guinea, representing ~3,620 bbl/d net to Panoro WI. This is near our expectations of 3,790 bbl/d. The infill drilling campaign is scheduled to commence before year end, following a two well workover program utilizing the drilling rig. The first of the three infill wells is expected to be online around the end of 1Q24, with all three expected online by 2Q24. The high impact Akeng Deep prospect is scheduled to spud following the completion of the workover and infill drilling campaign.
Financials and Valuation
Our Core NAV has increased from ~NOK36 per share to ~NOK37.5 per share to incorporate the new volumes. Our ReNAV is now ~NOK50 per share. At US$85/bbl for Brent until YE25, we forecast that Panoro would generate ~US$350 mm of aggregate free cash flow over the period (assuming no exploration spending) from June 2023 to YE25. This represents ~100% 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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