OKEA (Buy, TP: NOK42.00) - Solid start to the year
A recovery from a significant underlift position at end-2022 resulted in strong sales volumes for OKEA in Q1, triggering our positive estimate changes, particularly for 2023. We expect produced and sold volumes to move more in tandem, leaving less room for such surprises. Nevertheless, we continue to find the OKEA investment case attractive with strong FCF in 2023–2024e supported by organic and inorganic production growth on top of significant opportunities in its contingent resource base. We reiterate our BUY and have raised our target price to NOK42 (41) on higher estimates.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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