Faroe Petroleum (Buy, TP: GBP158.00) - Just keeps getting better
In its H1 operational update, Faroe Petroleum raised the Iris/Hades 2C estimate by 50%, clearly overshadowing the slightly reduced production guidance to 12–14kboed (12–15kboed). H1 EBITDAX was GBP75m, in line with our estimate when using actual oil/gas prices and adjusting for the Oselvar/Oda compensation payment being GBP20m higher than we expected. We have raised our target price to GBp158 (145) due to higher oil/gas prices in 2018e, the compensation payment, increased 2C estimate for Iris/Hades, and inclusion of the Brasse East exploration well in our NAV.Faroe Petroleum plc is an oil and gas company. The Company is focused on exploration, appraisal and production opportunities in Norway and the United Kingdom. Its portfolio consists of approximately 60 exploration, appraisal, development and production licenses in the West of Shetland, the North Sea, Norwegian Sea, Barents Sea and the Celtic Sea. Its Aerosmith - PL644/PL644 B is located approximately 20 kilometers from the Morvin and Smorbukk Fields in the prolific Halten Terrace hydrocarbon province of the Norwegian Sea. The Bister Prospect is located in the Norwegian Sea in License PL348 C, which also contains the producing Hyme Field and the Snilehorn discovery, which are adjacent to the producing Njord Field. The Brage Field is located east of Oseberg in the northern part of the North Sea. The Butch Main discovery is situated in approximately 65 meters water depth in the Southern North Sea. The Gullaxy Prospect is situated to the north of the Butch discovery in the Central Graben.
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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