Ahead of Aker BP’s Q3 trading update (due at 07:00 CET on 14 October), we forecast net production of 420kboed, 2% above Bloomberg consensus at 411kboed. However, our realised liquids price of USD77.8/bbl is below quoted Brent and consensus as the Johan Sverdrup price differential was slightly negative in Q3. We forecast EBITDA of USD2,585m for the quarter, 2% below consensus. Our 2024e production at 436kboed remains at the top end of the guided 420–440kboed. We reiterate our BUY and NOK280 targe...
‘Soft landing’... the term is in vogue and we think it aptly describes the current situation in the energy market. After a period of “excess profits”, the fundamentals are back in favour and prompt us to revise down our estimates for energy prices. - Alongside renewable energies, pockets of sustainable value creation are emerging for players capable of capitalising on the structural growth in volatility on the electricity markets but which are nonetheless trading at a discount In ...
“Soft landing”… le terme est à la mode et nous pensons qu’il caractérise bien la situation du marché de l’énergie aujourd’hui. Après une parenthèse de « surprofits », les fondamentaux reprennent leur droit et nous conduisent à réviser en baisse nos hypothèses de prix de l’énergie. A côté du renouvelable, des poches pérennes de création de valeur apparaissent pour les acteurs capables de profiter de la croissance structurelle de la volatilité des marchés électriques et qui souffre...
Following the recent sharp oil price drop to ~USD70/bbl, we see increased investor concerns about the robustness of shareholder distributions. Historically, disappointments related to dividends and/or buybacks have triggered meaningful negative share-price reactions. For our large-cap NCS coverage, we believe oil prices would have to move below USD60/bbl for any negative surprises to unfold for Aker BP and Equinor, as both have strong balance sheets, enabling dividend flexibility. On the other h...
This week, we published an update on DNO, seeing significant value potential from its Norwegian portfolio. As one of the most successful NCS exploration companies in recent years, the company has discovered net resources of ~135mmboe. In other news, we upgraded Aker BP to BUY (HOLD), viewing its recent underperformance as an attractive entry point. Also, a gas market update with Equinor left us slightly more bullish with regards to the near- and long-term gas market outlook.
Aker BP underperformed peers by ~5% over the past week following the recent drop in the oil price. However, our base-case assumptions are unchanged, i.e. no reversal of the OPEC cuts, and oil prices recovering towards USD80/bbl by 2026. We see an attractive entry point for Aker BP after its recent share-price weakness, as macro ‘noise’ has drowned out operating tailwinds (stabilised water-cut levels and positive Sverdrup plateau production news, as well as Tyrving start-up ahead of schedule). As...
This week, the Aker BP-operated Tyrving field commenced production ahead of the planned start-up in October. In other news, Vår Energi completed the divestment in the Norne area to DNO; adjusting for cash flow between the effective transaction date on 1 January and close on 30 August, DNO paid a net cash consideration of ~USD24m. Also, BlueNord reported August preliminary production of 27.0kboed. Adjusting for the Harald fiel
This week, we updated our oil and gas price assumptions. We see a softer oil market balance than before and have lowered our oil price assumptions. For gas, we have raised our assumptions based on increased geopolitical risks. Accordingly, we have updated our company estimates. Despite outperforming Equinor and Aker BP by ~25% YTD, we have kept Vår Energi as our top sector pick.
The Norwegian Offshore Directorate’s (NOD) preliminary NCS figures for July showed strong liquids production of 2,079kboed (6.2% above forecast) and gas production of 360mcm/d (12.3% above forecast). Overall production was 4.35mmboed, up 5% MOM (9.3% above forecast). Company-wise, production was up MOM for Equinor, Vår Energi and OKEA, but down for Aker BP and DNO. With the Q2 reporting season complete, the NOD’s field-by-field breakdown should be well known.
Expecting a softer oil market balance than previously, we have lowered our H2 2024 and 2025 oil price assumptions, with a negative impact on Aker BP given its high share (~85%) of liquids production. With the stock trading close to our NAV, we struggle to see meaningful near-term upside potential considering the post-plateau Johan Sverdrup production uncertainty and a likelihood of consensus capex in the out-years being revised higher. We reiterate our HOLD, but have cut our target price to NOK2...
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