Lundin Petroleum (Sell, TP: SEK228.00) - Neutral Q2 expected
Lundin’s Q2 results are due at 07.30 CET on 31 July. We are 2% below consensus Q2 EBITDA. Our 82kboed production estimate is in line with consensus and at the high end of full-year company guidance of 74k–82kboed; we believe Lundin could notch up the mid-point guidance at Q2. We like Lundin for its high-quality asset portfolio, and inherent upside risk to key assets Sverdrup and Grieg. However, the valuation appears inflated, with an implied oil price of ~USD100/bbl based on our NAV; thus we reiterate our SELL recommendation and SEK228 target price.Lundin Petroleum is an oil and gas company. Co. has a global portfolio of assets with two main areas located in Norway and South East Asia. As of Dec 31 2014, Co. held close to 70 licences in Norway, with activities across exploration, appraisal, development and production. Co. also operated within several geographical areas, including France, Netherlands, Malaysia, Indonesia, Russia, Sweden and other countries.
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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