Panoro Energy (Buy, TP: NOK45.00) - Eyeing double-digit yield in 2024
While Q3 EBITDA missed our estimate, and the new guidance prompted us to raise our 2024e capex, focus in the report was the capital allocation policy. Management is targeting capital distributions of NOK400m–500m for 2024, implying a 12–15% yield, which we find attractive, particularly given it looks likely to be more of a transition year with high investment activity in H1 that should fuel H2 FCF generation and set the base for meaningful upside potential YOY to capital distributions in 2025. We reiterate our BUY and NOK45 target price.Panoro Energy is an international independent oil and gas company engaged in the exploration and production of oil and gas resources in Brazil and West Africa. In Brazil, Co. participates in a number of oil and gas licenses located in the Santos basin outside the south-east coast of Brazil and in the Camamu-Almada basin in the state of Bahia. In West Africa, Co. participates in a number of licences in Nigeria and Gabon. As of Dec 31 2013, Co.'s commercial production is from the Manati field in Brazil.
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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