Weekly news, topics & discussion

In the past week, we published an update on Equinor; we expect lowered renewables targets and capex guidance at the upcoming Capital Markets Update to be overshadowed by limited will or capacity for attractive shareholder distributions beyond 2025. We see significant downside risk for the stock to trade in line with peers on 2026e total shareholder yields. In other news, Panoro Energy released its Q3 results; we consider the report fairly neutral. Finally, production at Johan Sverdrup is back to...

Energy Morning - 20 November 2024

Brent spot: USD 73.0bbl, up 0.5/bbl from last OSE close.OSX: 77.3, down 1% since last OSE close.Borr (B): receives another suspension – not unexpected but a small negative.DNO (B): "good chance that a discovery has been made" on Falstaff, positive.PEN (B) Q3: Production now above 13kboe/d.API estim

Valuation update

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

US shale: limited revisions and colour on 2025 activity levels

Our Q3 survey of the US shale universe showed limited revisions to guidance for 2024, and we still expect muted 2024 production growth of ~4–5% YOY (+8% YOY in 2023). Our survey also suggests capex down ~2% YOY, as the companies continue to guide for flat activity. Limited colour was provided on 2025 activity levels and associated capex, which we will know more about in the Q4 results season. For Q3, our universe marginally underspent its cash flow, albeit with net debt continuing to build QOQ a...

Valuation update

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

Weekly news, topics & discussion

This week, DNO reported Q3 underlying results fairly in line with our estimates. It also introduced a long-term production guidance for its North Sea operations, which we find a bit too aggressive. Still, we estimate the North Sea net production to increase from 15kboed in 2024 to >20kboed in 2027. In other news, Equinor acquired a 11.8% stake from Sval Energi in the Halten East development, and BlueNord’s preliminary October production figures were at the lower end of its Q4 base production gui...

AUCTUS ON FRIDAY - 01/11/2024

AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; Target price of A$0.70 per share: Approvals to start well testing at Welchau received. Rig and test equipment mobilized – All necessary approvals have been received to commence flow testing operations on the Welchau-1 discovery well for the period from 30 October 2024 until 31 March 2025. A workover rig has been mobilised to the Welchau-1 drill site with flow testing due to commence during the second half of Novem...

12% dividend but uncertainty in Kurdistan

DNO (Buy, TP: NOK15.00) - Set for North Sea growth

We consider the Q3 results in line with expectations, with EBITDAX of USD107m versus our estimate of USD109m. While we find the new long-term North Sea production guidance a tad aggressive, implying a near doubling in production over 2024–2027, we still estimate the company will increase net production from ~15kboed in 2024 to >20kboed in 2027, while sustaining the current dividend level (yielding 12%), which should be covered by Kurdistan cash flow. We reiterate our BUY and NOK15 target price.

Q3: EBITDA in line adjusted for exploration expense

Energy Morning - 6 November 2024

Valuation update

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

Weekly news, topics & discussion

This week, Aker BP reported Q3 results, with underlying figures in line with expectations. We believe operational tailwinds could benefit it going into 2025, with consensus perhaps underestimating the production potential. Meanwhile, although OKEA reported a strong Q3, we believe it was overshadowed by the introduction of production and capex guidance, which we consider soft. In other news, we see several potential share-price catalysts for BlueNord in the coming months, with the Tyra restart se...

Valuation update

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

Potential exploration catalysts

Exploration activity on the NCS has remained high into Q4, with six exploration wells and one appraisal ongoing, and up to 10 more expected by year-end, representing 1.3bn boe in total resource potential. We consider Bounty, Arkenstone, Falstaff, and Kvernbit as key wells to keep an eye on. In our view, OKEA stands out relative to its own size due to its 20% stake in the upcoming Arkenstone well, with substantial upside potential if successful. Meanwhile, we believe Equinor, Aker BP, and Vår Ene...

Weekly news, topics & discussion

This week, Equinor reported Q3 results in line with our estimates. We believe focus among investors remains on the potential for reduced renewable capex at its CMU in February 2025, where we consider the risk/reward attractive and see a reduction to its renewable capex as likely. Also, Vår Energi reported solid Q3 results, with EBITDA 6–5% above expectations. In other news, OKEA reported strong Q3 production, with 2024 production likely to reach the high end of its guidance.