OKEA (Buy, TP: NOK27.00) - Potential return of dividends
OKEA reported strong Q4 production of 37.8kboed, well above our 32.4kboed estimate. Considering the solid balance sheet (NOK735m net cash) and our expectation of LTM net profit turning positive in Q4, we believe OKEA is well positioned to restart dividends shortly. We estimate a NOK2.5 DPS for 2025 (~11% dividend yield). In our view, a potential dividend restart should set the stage for a share price recovery and a narrowing of the NAV discount (currently 40%). We reiterate our BUY and NOK27 target price.Okea ASA is a Norway-based oil company engaged in the oil and gas exploration and production industry. The Company contributes to the value creation on the Norwegian continental shelf with development and operation systems through the utilization of the result of previous and ongoing exploration activities in order to bring undeveloped oil on stream in strategic cooperation with service companies. Its services do not involve the exploration for petroleum. The Company operates an office in Trondheim, Norway.
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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