reports
- Steffen Evjen
- Steffen Evjen
US shale: limited growth expected
Our Q1 survey of the US shale universe showed limited revisions to guidance for 2024, and we still expect muted 2024 production growth of ~4% YOY (+8% YOY in 2023). The companies now expect fewer tailwinds from cost deflation, primarily due to operational efficiencies. Our survey also suggested capex down ~2% YOY, as companies guide for flat activity. For Q1, our universe spent 102% of its operating cash flow, split c50/50 capex and shareholder distributions.
- Steffen Evjen
Weekly news, topics & discussion
Key takeaways from this week are: 1) BlueNord’s Q1 figures were in line with our estimates, and due to technical issues, the Tyra plateau ramp-up was prolonged to mid-Q4 (2024 production guidance reduced from >40kboed to ~35kboed); 2) DNO’s Q1 report showed net production slightly above consensus, and it announced it has acquired stakes in five fields in the Norne area from Vår Energi, adding ~3kboed of net production near-term; and 3) Panoro Energy’s Q1 trading update showed net production of 9...
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
This week, we published a note on Aker BP highlighting our growing concerns of sharp cuts to consensus FCF, with capex assumptions beyond 2026 looking far too low to us – we are ~40% below consensus on 2027–2030e FCF. As well as BW Energy’s Q1 trading update revealing net production just below our estimate, it announced a sale & leaseback agreement, which we see as marginally accretive to our NAV. In other news, we believe the Tyra ramp-up will be in focus in BlueNord’s Q1 results, due next week
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
This week, Equinor, Aker BP and Vår Energi released their Q1 results. In short: Equinor reported on the strong side, with a solid FCF beat fuelled by a working capital tailwind. Aker BP had a solid Q1 all around, while there was limited new news on Johan Sverdrup. For Vår Energi, with the results in line with our expectations, we believe investor focus remains on the Jotun FPSO sail-away.
- Steffen Evjen
Vår Energi (Buy, TP: NOK40.00) - Jotun FPSO sail-away in focus
Q1 was in line with our expectations and consensus. Over the next months, we believe investor focus will remain on the Balder X development and the August sail-away schedule for the Jotun FPSO, a pre-requisite for production start in Q4 this year. Our estimates reflect start-up in late-2024, but based on our investor discussions, most seem to factor in the FPSO not reaching the August sail-away deadline and start-up being delayed until end-Q2 2025. We view the risk/reward as attractive should Ba...
- Steffen Evjen
Solid NCS production in March
The preliminary Norwegian Offshore Directorate (NOD) production figures for the NCS in March showed strong liquids production of 2,086kboed (~4% above forecast) and gas production of 365mcm/d (broadly in line). Overall production was up 2.7% MOM. On a company level, production was down MOM for most names in February; Aker BP and Equinor were hit by reduced production from Johan Sverdrup, while Vår Energi was hampered by downtime at Fenja.
- Steffen Evjen
Weekly news, topics & discussion
This week, we published a Q1 preview on Equinor. We believe its share price upswing since its CMU is mainly attributable to strong performance by its peer group. The stock is trading at a 15% premium to peers, in line with its historical average. In other news, Vår Energi reported Q1 production in line with our estimates, with realised prices slightly above. We expect focus in the full Q1 report (due on 23 April) to be on Balder X and Johan Castberg. Also, according to news sources, Equinor’s ch...
- Steffen Evjen
- Steffen Evjen
Vår Energi (Buy, TP: NOK40.00) - Decent start to the year
Vår Energi reported solid Q1 net production of 299kboed in its trading update, in line with the guidance provided in March. Realised prices for liquids and gas were 1–4% above our estimates. Our 2024e net production of 300kboed is at the high-end of the 280–300kboed guidance, albeit with limited incremental production from Balder X and Johan Castberg. For the Q1 results (due at c07:00 CET on 23 April), we expect focus to be on the execution and timeline of the Balder X (if start-up slips into Q2...
- Steffen Evjen
Weekly news, topics & discussion
This week, Equinor, Vår Energi and Aker BP reported their Q1 trading updates ahead of their full quarterly results later this month. Equinor’s update contained little incremental information for the quarter, Vår Energi reported net production of 300kboed (in line with our estimate, whereas realised prices were slightly above), and we find Aker BP’s update supportive of our 2024 above-guidance production estimate.
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
This week, we updated our estimates for Vår Energi following its Capital Markets Update. We believe Vår Energi presented a viable plan to sustain production above 340kboed until 2030, with upside potential to our estimates if exploration proves successful. As investors gain more confidence in Vår Energi’s long-term production outlook, we see the potential for a repricing towards peers on dividend yield, implying >20% upside potential from yesterday’s close. In other news, we published notes on B...
- Steffen Evjen
Vår Energi (Buy, TP: NOK40.00) - The road to 2030
At its Capital Markets Update in mid-March, we believe Vår Energi presented a viable plan to sustain production above 340kboed until 2030, with upside potential to our estimates if exploration proves successful. The company is set to generate cUSD1.1bn in annual FCF in 2025–2030e, implying that the current ~13% dividend yield is covered by FCF. As investors gain more confidence in Vår Energi’s long-term production outlook, we see the potential for a repricing towards peers on dividend yield, imp...
- Steffen Evjen
- Steffen Evjen
Weekly news, topics & discussion
This week, we published a report on Aker BP, highlighting the underperformance YTD versus peers, mainly due the soft 2024 guidance and news of Johan Sverdrup coming off plateau earlier than expected. In other headlines, the preliminary figures from NOD show overall production in line with its forecast, with gas production slightly below and liquids production slightly above. Also, the Tyra redevelopment project came on stream this week, in line with expectations.
- Steffen Evjen
NCS production figures in line
Preliminary NOD (Norwegian Offshore Directorate) production figures for the NCS in February revealed gas production of 358mcm/d, slightly below NOD’s forecast. Liquids production was ~2% above NOD’s forecast at 2,064kboed. Total NCS production was down 3.2% MOM and up 1.6% YOY. On a company level, for January, Aker BP production was slightly weaker MOM, mainly due to reduced production at Johan Sverdrup (due to maintenance work), while Vår Energi saw production up 2% MOM, due to increased produc...
- Steffen Evjen
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