A game changer
Q2 was a bit soft with EBITDA below expectations, well impairment in Oman, and increased capex guidance. However, the deal between KRG and DNO essentially exchanging the receivable to increased ownership in the Tawke licence is a game changer, in our view. We estimate an NAV uplift of NOK1.8/share post deal, and have increased our target price accordingly to NOK 13.1 (11.3). In addition, the company thus increases its exposure to the Peshkabir discovery, which we believe offers significant upside potential.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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