Energy Morning - 6 March 2025

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

US shale: resilient growth in 2025e

Based on our Q4 survey of US shale companies, we expect continued efficiency gains, productivity improvements, and operational synergies from consolidation to drive ~5% YOY liquids production growth in 2025, broadly in line with 2024 levels. This is despite an estimated 5% YOY decline in capex, indicating that production is expanding steadily without a corresponding increase in activity. The combination of rising production and declining capex is likely to drive down breakeven levels, strengthen...

Energy Morning - 3 March 2025

Weekly news, topics & discussion

This week, Panoro Energy reported Q4 results and 2025 guidance in line with expectations. While production may trend towards the lower end of the guided 11–13kboed, the stock’s ~30% NAV discount suggests solid execution could drive a re-rating. Meanwhile, BlueNord expects to complete the Tyra completion test by mid-March, having already surpassed the 34.0kboed gas export threshold – a key milestone that would enable shareholder distributions. In exploration, Vår Energi announced a ~13–45mmboe di...

Energy Morning - 28 February 2025

Better entry points to come

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Weekly news, topics & discussion

This week, the Norwegian Offshore Directorate (NOD) released preliminary January production figures for the NCS, showing a 6.5% YOY decline, with overall production at 4.17mmboed on weaker gas output. Uncertainty remains over Kurdistan oil exports, with reports suggesting a potential March restart, although Turkey has yet to receive confirmation. In exploration, the NOD confirmed the Bounty Updip prospect as dry.

Vermilion Short Shots: Technically Vulnerable Stocks

Short Shots is a collection of technically vulnerable charts culled from the Negative Inflecting and Toppy columns within our Weekly Compass report or from various technical screening processes. The charts contained in this report have developed concerning technical patterns that suggest further price deterioration is likely. For these reasons Short Shots can also be a great source of ideas for investors interested in short-selling candidates.

January NCS production down YOY

The Norwegian Offshore Directorate’s (NOD) preliminary January NCS figures showed liquids production of 1,990kboed (0.5% above its forecast) and soft gas production of 346mcm/d (2.6% below its estimate). Overall production was 4.17mmboed (1% below its forecast), down 2.8% MOM and 6.5% YOY. Company-wise, December production should be well known following the Q4 results for our NCS coverage.

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Q4 and 2025 guidance below cons

Weekly news, topics and discussion

This week, Aker BP reported solid Q4 results, with 2025 production guidance in line with our estimates and consensus, although 2025 capex was slightly above. Vår Energi reported softer Q4 results than expected but raised its quarterly dividend from USD270m to USD300m (~15% yield). However, we remain cautious on long-term dividend sustainability, given the expected decline in FCF from 2027e due to raised capex guidance. Meanwhile, BlueNord announced its first dividend of USD215m (~15% yield), sch...

Entering the harvesting phase

BlueNord (Hold, TP: NOK680.00) - The dividend tap has opened

BlueNord reported a solid Q4, with EBITDA of USD109m, above our estimate of USD78m and consensus of USD95m. While 2025 production guidance was slightly lowered, the focus was on its first dividend (USD215m, ~15% yield), scheduled for payment in late Q1 when the Tyra completion test is met. This would be the first of USD1bn (~60% of market cap) in total dividends by end-2026e. Still, we find the stock fairly valued, trading at a P/NAV of 1.2x. We reiterate our HOLD and NOK680 target price.

Energy Morning - 12 February 2025

Large dividend, softer FY25 production guidance

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Too early to buy the market recovery