DNO (Hold, TP: NOK16.30) - Up 63% YTD, time for a break
With the share price up 63% YTD, we have downgraded to HOLD (BUY). We estimate Q1 EBITDA of USD92.5m, in line with consensus (Q1 results due on 26 April). We applaud DNO’s move to acquire 28.7% of Faroe Petroleum at GBp125/share, as we consider it a high-quality company with strong assets. We have raised our target price to NOK16.3 (13), as we have rolled our NAV one-year forward and included Peshkabir in our 2P reserves modelling.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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