Panoro Energy ASA (OSE: PEN): Reaching 13 mbbl/d net production
• 4Q24 WI production was 12,052 bbl/d. While this is in line with our expectations, we note that gross production in Gabon has been stable at ~40 mmbl/d since November. This represents ~7 mbbl/d net to Panoro’s WI. Panoro’s corporate production has reached 13 mbbl/d in November.• There is potential to increase spot gross production in Gabon to 44 mbbl/d, which is 10% above the nameplate capacity, without any incremental capital expenditure. Incorporating maintenance, we assume a run rate of 38,000 to 40,000 bbl/d.
• 4Q24 production in Tunisia reached 1,491 bbl/d, a 10% increase compared to 3Q24. Additionally, the El Ain-3 well was brought back online at around 200 bbl/d following a workover in January, after being shut-in since March 2024.
• We re-iterate our target price to NOK46 per share in line with our ReNAV.
• With Dussafu at plateau production and the refinancing of its debt completed, Panoro has become a stable production company with substantial free cash flow and significant exploration upside. The current dividend yield for 2024 is now over 7%. With US$73 mm in cash at year-end 2024 and over US$100 mm in free cash flow expected in 2025, we believe the dividend could be increased further. From May 2024 to January 2025, Panoro also repurchased 1.6% of the company's share capital.
• Drilling at the Bourdon prospect in Gabon is ongoing. Results are expected during 1Q24. Our unrisked value for the prospect is >NOK4 per share.
4Q24 financials
In 4Q24, 1.42 mmbbl were lifted, generating proceeds of US$100.7 mm, with US$13.5 mm of this received in January. The company held US$77 mm of net debt at year-end 2024, which would be US$63.5 mm if the January payment for the December lifting is included in the calculation.
Valuation and forecast
Our Core NAV is NOK33 per share with a ReNAV of NOK46 per share. Our FY25 Free Cash Flow forecast for the company represents >40% 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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