Romanian Oil and Gas: value from the deep (OMV Petrom and Romgaz stay BUY – transfer of coverage)
We expect record-high net profit for both OMV Petrom and Romgaz over 2022-23E, driven by the good macro. Over the medium term, we continue to see oil/gas prices above historical averages, propping up the results of both companies far above the average profit of past years. In our view, the current, imposed regulations are cutting away most of the upside potential from the very high gas prices, but allowing both operators to deliver healthy returns. The amended version of the offshore law, adopted in May this year, provides the required stability clause and reasonable taxation environment, in our view; and, this, coupled with our expectations that gas prices are likely to remain elevated in the long run, makes us confident on a positive final investment decision (FID) for Neptun. In our view, Neptun’s development would lift the profitability of both companies substantially. The share prices of both have rallied over the past 12 months, delivering total returns of 41% at Petrom and 48% at Romgaz. In this report, we transfer coverage of the stocks and, given the high dividend potential in the medium term and the long-term upside from Neptun, we keep our BUY recommendations on both OMV Petrom (new price target (PT) at RON 0.875, 88% upside) and Romgaz (new PT at RON 65.6, 48% upside).
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.