Brooge Energy - Phase II underway, Phase III feasibility study
Brooge Energy (BROG) recently engaged Ernst & Young to perform a feasibility study for its Phase III oil storage facility, an important step towards starting construction. Meanwhile, BROG’s Phase I operations are benefiting from current high demand for oil storage and in December it novated contracts for 58% of total storage capacity, at 50% and 60% premiums to previous contracts, paving the way to higher revenue and EBITDA in FY21. Updating on Phase II, BROG expects a six-month delay due to the COVID-19 situation. While this reduces our FY21 forecasts, the underlying fundamentals remain unaffected. Our updated valuation, based on Phase I and Phase II, using a blend of DCF, EV/EBITDA and P/E approaches, increases to $11.4/share (from $11.0/share).
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