Panoro Energy ASA (OSE: PEN): Large cash build-up expected in 2H25
• 2Q25 production of 11,064 bbl/d had already been reported. The production was impacted by unplanned downtime at Ceiba (~5,000 bbl/d gross or ~700 bbl/d net to Panoro’s 14.25% WI). Remedial works are expected to restore production in 4Q25.• In 2026, Panoro will drill four development wells at Hibiscus and Hibiscus South on the Dussafu licence, targeting first oil in 2H26. This programme is designed to restore gross plateau production to ~ 40,000 bbl/d. With the rig already on site, Panoro could also drill a new exploration well. Net remaining prospective resources on the Dussafu licence are estimated at ~25 mmbbl. This figure will be revisited in light of the recent discoveries and better understanding of the subsurface.
• Subject to licence extension, Panoro aims to re-enter a shut-in well at Rhemoura (Tunisia) in 1Q26, adding 300–500 bbl/d gross (150–250 bbl/d net to Panoro’s 50% WI). Future activities will include appraisal and development drilling.
• The company has recently awarded a contract to reprocess existing seismic over EG-23, with updated resource estimates due in 2026. These enhanced subsurface insights will support a targeted farm-out ahead of a planned drilling campaign.
• The cash dividend yield is ~13%. Assuming only a NOK100 mm share buyback program is executed in 2025, total shareholder yield would reach >18%.
• We re-iterate our target price of NOK49 per share.
Cash build
At 30 June, Panoro held US$55 mm in cash. Net debt based on cash, debt and the US$20 mm cash advance from Trafigura was US$115 mm at the end of June. With 2H25 liftings of 2.55 mmbbl and capex of only ~US$14 mm, we forecast that the company’s net debt position will be reduced by US$60 mm by YE25, even after distributing an additional US$15 mm in cash dividends.
Valuation
Our Core NAV and ReNAV are unchanged at NOK39 per share and NOK49 per share respectively. We currently assume ~US$40 mm capex in 2026. At US$70/bbl for Brent, this would lead to ~US$55 mm free cash flow.
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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