Vår Energi (Buy, TP: NOK43.00) - 2025 production target still in reach
With soft Q4 production, we expect production for 2022 to end at 220kboed, well below the initial 230–245kboed guidance. We believe the weak production in 2022 and delays to the important Balder X development have raised questions among investors about how realistic the 2025 production target level of >350kboed is. We conclude that the target still seems viable with 336kboed average production in 2025e, supporting strong FCF generation. We reiterate our BUY but have trimmed our target price to NOK43 (44) on our lowered oil price assumption to USD95 (105) for 2023e.
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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