DNO (Buy, TP: NOK12.00) - 2024 guidance in line
Q4 EBITDA was USD116m, in line with Infront consensus of USD114m. The 2024 production and spending guidance was in line with our expectations, prompting limited estimate changes. However, we have reduced our 2024e EBITDA by 6%, as our estimates imply an export restart from Kurdistan in H2 (previously Q2), with meaningful uncertainty still attached to that timeline. We expect DNO to remain priced at a significant discount to NAV until the pipeline dispute is resolved. However, we find the current P/NAV of 0.45x a too large discount to our fair P/NAV of 0.6x. We reiterate our BUY and NOK12 target price.DNO is a Norwegian exploration and production company focused on the Middle East and North Africa. Co. holds stakes in oil and gas blocks in various stages of exploration, development and production, both onshore and offshore, in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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