DNO (Buy, TP: NOK13.50) - Positioned to withstand uncertainty
With its strong balance sheet and high operational flexibility, we believe DNO is well positioned to withstand the uncertainty related to the halt in oil exports and subsequent production shutdown in its Kurdistan operations, negatively affecting a significant part of its total production. Nevertheless, the recent geopolitical trend has increased the risk to the investment case. Thus, we reiterate our BUY but have cut our target price to NOK13.5 (16).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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