DNO (Hold, TP: NOK6.00) - Liquidity not an issue
We forecast Q2 EBITDA of USD7m versus consensus of USD20m on lower net production but in line with the updated guidance (results due at 07:00 CET on 30 July). We continue to see a risk to Kurdistan payments but expect the cash position to remain solid, helped by the tax change on the NCS. We reiterate our HOLD but have raised our target price to NOK6 (4).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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