DNO (Hold, TP: NOK4.00) - Q1 helped by cost reversal
DNO reported Q1 EBITDA of USD135m, in line with our estimate and consensus, but on lower than expected revenues offset by lower exploration costs and reversal of SG&A costs in the quarter. Hence, we consider the report slightly on the soft side with lower underlying EBITDA than expected. With further cuts in operational spend and a suspension of dividends, DNO is protecting its cash positioning given the continued uncertainty on payments in Kurdistan.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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