reports
- ABGSC Oil & Oil Services Research
- John Olaisen
- ING Helpdesk
Benelux Morning Notes
Ahold Delhaize: Release of 1Q24 company-compiled consensus. AkzoNobel: Decent 1Q24 with 4% beat, FY guidance reiterated. Allfunds Group plc: On the verge. Barco: Weak 1Q24, more conservative wording on guidance. DWS: 1Q24 preview. Flow Traders: No respite in March. IMCD: Last hurdle before growth. Randstad: 1Q24 slight miss vs consensus, 2Q24 outlook below due to weak gross margin. TKH Group: Preview – a weak 1Q expected Vår Energi: Nice start to the year
- ING Helpdesk
- Steffen Evjen
- Steffen Evjen
Record-breaking Johan Sverdrup
The Johan Sverdrup field continues to excel, as oil production capacity has been successfully tested at 755kboed. While Equinor and its partners aim to maintain production at this level, we highlight that since start-up in 2019 the field has traditionally produced at slightly higher levels than production capacity suggested. We believe this supports production being sustained at this level for some time. For Aker BP, this implies current production capacity of ~500kboed, well above its 430–460kb...
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
This week, DNO reported Q1 results, in which it withdrew its 2023 production guidance for Kurdistan, given the uncertainty since the export shutdown on 25 March. However, the oil minister of Iraq stated that crude exports to Turkey could resume from Saturday, but that it is still awaiting a response from Turkey. In other news, reports suggest that BW Energy has received regulatory approval in Brazil for the acquisition of offshore assets, although there are still some other aspects to be ironed ...
- Steffen Evjen
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
We consider the Q1 reports from Aker BP and Vår Energi neutral, and highlight the potential for Aker BP to beat its 2023 production guidance, expecting a QOQ production increase in Q2 supported by a reversal of downtime and raised production from Johan Sverdrup. We have also included Panoro Energy’s increasing ownership in TPS, which was accretive to our NAV and prompted us to increase our target price to NOK42, with an unchanged BUY recommendation.
- Steffen Evjen
- Steffen Evjen
Vår Energi (Buy, TP: NOK38.00) - No news is good news
While we are neutral on Vår Energi’s Q1 report, with limited news as regards the investment case, we believe investors were relieved that there was also no negative news for the first time in several quarters. Its three key developments, which are crucial to our estimated strong free cash flow growth over the coming years, were said to be progressing according to plan, with start-ups through 2024e. The stock is trading at a small discount to our NAV and a solid ~18% dividend yield. We see large ...
- Steffen Evjen
Weekly news, topics & discussion
Aker BP reported reasonable Q1 production figures in our view, while DNO’s production figures were somewhat soft although we believe this was partly expected. In other news, Panoro Energy increased its ownership in the TPS assets in Tunisia (accretive to our NAV by ~NOK1/share), while March NCS liquids production was finally decent (0.6% above the NPD’s forecast) after a long period of missed forecasts. Vår Energi’s and Aker BP’s Q1 reports are due next week.
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
Equinor and Vår Energi published Q1 trading updates this morning; Vår Energi reported production and liquids prices in line with our estimates and strong gas price realisation (although we do not believe this should be extrapolated), while Equinor recorded another strong quarter in its trading segment. In other news, this week we initiated coverage on OKEA with a BUY and we expect Aker BP to report strong Q1 production.
- Steffen Evjen
- Steffen Evjen
Vår Energi (Buy, TP: NOK38.00) - Fixed gas prices to the rescue
With roughly one-third of its Q1 gas sales fixed at USD285/boe, Vår Energi is set to realise significantly stronger gas prices than its NCS peers in the quarter. We expect these favourable agreements to keep its free cash flow on the positive side. Besides this, we expect limited surprises on production, costs and dividends, as these should be in line with previous guidance and expectations. We reiterate our BUY and NOK38 target price.
- Steffen Evjen
Vår Energi (Buy, TP: NOK38.00) - Fixed gas prices to the rescue
With roughly one-third of its Q1 gas sales fixed at ~USD150/boe, Vår Energi is set to realise significantly stronger gas prices than its NCS peers in the quarter. We expect these favourable agreements to keep its free cash flow on the positive side. Besides this, we expect limited surprises on production, costs and dividends, as these should be in line with previous guidance and expectations. We reiterate our BUY and NOK38 target price.
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
DNO started shutting down production of its operated fields in Kurdistan on Tuesday night; after it was instructed to temporarily halt deliveries to the Iraq-Turkey pipeline following a recent arbitration ruling, increasing the risk to consensus Q1–Q2 estimates. In Norway, Equinor extended contracts for two Transocean CAT-D rigs at clean dayrates of USD360k–380k to drill 28 wells, with options to drill another 14. In other news, Petrobras stated any revision of its strategic plan would not inclu...
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