DNO (Buy, TP: NOK15.00) - Consuming its net cash position
While the recent budget amendment in Iraq is a positive step towards potentially resuming oil exports through the Iraq–Turkey pipeline, there still appears to be several obstacles to overcome, most notably how DNO should be paid for its oil. Until these issues are solved, Kurdistan production is being sold locally at heavily discounted prices (~USD35/bbl). We estimate 2025 to be broadly FCF neutral, implying the NOK1.25 DPS would be primarily funded by increasing net debt. Our estimates still imply an export restart in 2026, prompting a sharp YOY increase in FCF. We reiterate our BUY and NOK15 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.