DNO (Buy, TP: NOK13.10) - August payment proves sweet deal
DNO reported a gross entitlement payment for Tawke August production of USD46.5m, or USD34.9m net to DNO. Including the override payment of USD4.0m related to the Tawke Receivable Settlement Agreement (TRSA), total payment net to DNO for August is USD38.9m, which on our estimates is USD9.8m (annualised NOK0.88/share) higher than it would have been before the TRSA. We reiterate our BUY recommendation and NOK13.1 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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