Panoro Energy ASA (OSE: PEN): Executing on plans. Declaring a 2nd ~US$3 mm quarterly dividend
• 1Q23 production of 6,320 bbl/d had already been reported and net debt of US$25.5 mm at the end of March is close to previous indications (US$27 mm). In addition the company holds accounts receivable of US$53 mm with accounts payable of US$15 mm.• The new Hibiscus Ruche Phase I well is producing at a stabilized gross rate of 6 mbbl/d. This is at the top end of our expectations.
• Current production is ~8.5 mbbl/d. The new gas lift compressor on the Gabon FPSO is about to come on line. This will allow production from the existing six Tortue wells to be maximized. The second Hibiscus Phase I well is expected to come on stream in June.
• The company has re-iterated its FY23 production guidance of 9.5 11.5 mbbl/d with production expected to reach over 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.
• A dividend of NOK31 mm has been declared for 2Q23. This follows the maiden dividend of about the same amount declared in February.
• -We re-iterate our target price of NOK50 per share.
Gearing for high impact exploration
The drilling contract in Gabon covers the six development wells at Hibiscus Ruche Phase I. There are also two optional wells slots that could be used for further wells at the end of the development programme. One of these wells could be an exploration well on Dussafu. Further visibility is expected in 3Q23. The Akeng Deep exploration well at Block S in EG (180 mmbbl gross resources) is expected to be drilled in 2Q24. We are not carrying any value for these prospects in our valuation yet.
Valuation
Our ReNAV is unchanged at ~NOK50 per share. We continue to forecast that Panoro will generate ~US$250 mm free cash flow in aggregate over 2023 2024. This assumes ~US$88-92/bbl for Brent. 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.