OKEA (Buy, TP: NOK28.00) - NAV discount set to narrow ahead
We forecast net production of 33kboed in Q3 (no reliable consensus), with realised liquids and gas price of USD77/bbl and USD64/boe, respectively. We estimate EBITDA of NOK1,580m, in line with Bloomberg consensus of NOK1,582m. We believe the accretive Yme transaction is key for the OKEA turnaround story, and a dividend restart in Q4 should set the stage for a recovery and a narrowing of the NAV discount. We reiterate our BUY and NOK28 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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