Panoro Energy ASA (OSE: PEN): High flow rate at EG infill well
• The C-45 infill well on Block G in Equatorial Guinea has been put on stream at a gross rate of 5 mbbl/d on a restricted choke. Production could increase as the choke size is increased.• While this is line with the company’s expectations, this takes gross production in EG to ~30 mbbl/d.
• The second infill well (OF-19) has been drilled and is expected to be on stream in the next two weeks. This could take gross production to ~ 35 mmbbl/d assuming OF-19 is similar to C-45. `
• With gross production in Gabon nearing 40 mbbl/d (excluding the contribution from wells requiring ESP work-overs), we continue to expect corporate production to be over 13 mbbl/d by YE24.
• Following the conclusion of the OF-19 infill well, the rig will move to the Akeng Deep prospect on Block S. Thise well is targeting a 180 mmbbl prospect (Panoro WI: 12%) with an unrisked NAV of ~NOK15/sh.
• We re-iterate our target price of NOK52 per share. The current dividend yield is >6.5%. Assuming Brent prices remain at current levels in 2025, Panoro free cash flow is expected to be material and the shareholder distributions could increase. We are anticipating a high Reserve Replacement Ration at YE24.
Valuation and forecast
Our Core NAV and ReNAV are respectively NOK34/sh and NOK53/sh (broadly unchanged).
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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