DNO (Buy, TP: NOK21.00) - Strong cash flow
Q3 adjusted EBITDA was USD140m, 8% above our expectation and 13% above consensus. Cash flow from operations adjusted for changes in working capital was USD140m, above our US120m estimate. With the company indicating exit rate production in 2018 in Kurdistan of at least 130kboed, we believe this is supportive for further consensus revisions in 2019, and we consider the report a positive.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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