reports
- 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
- 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
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
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
BlueNord (Buy, TP: NOK630.00) - Step by step to shareholder returns
Despite the shares being up ~18% YTD, we still see a solid risk/reward in BlueNord, helped by its investor-friendly shareholder return policy. Tyra was back in production on 22 March, which we believe will facilitate a capital structure reset, ultimately enabling BlueNord to reach its targeted distribution of 50–70% of operating cash flow for 2024–2026. Our estimates imply a ~50% payout of its (diluted) market cap over that time, significantly reducing the residual risk in the investment case. A...
- 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
- Steffen Evjen
Weekly news, topics & discussion
Our key takeaways from this week are: 1) Vår Energi providing more granularity at its CMU on how it plans to maintain production at 350–400kboed towards 2030; 2) highlighting a broad fair value range of NOK200–375 on Equinor (this week we reiterated our HOLD); and 3) our Q4 survey of the US shale universe, showing guided 2024 production growth YOY of just ~4% (down from 8% in 2023) following operating cash flow overspend in 2023.
- Steffen Evjen
US shale: Overspend stalls growth
Our Q4 survey of the US shale universe suggests muted YOY production growth of only ~4% for 2024 (compared to 8% YOY growth for 2023), mainly concentrated around the most prominent Permian names, with most other companies guiding for limited production growth. Despite a deflationary environment for costs, most companies continue to plan for flat activity, with productivity gains remaining the primary driver for production growth. We believe the lack of ambition to grow production meaningfully at...
- Steffen Evjen
Weekly news, topics & discussion
This week we hosted our 17th Annual Energy & Shipping Conference in Oslo, which included a panel discussion with the CEOs of Aker BP and Vår Energi. Addressing potential investor concerns, a key topic was the companies’ ability to sustain production long-term amid a structurally declining basin. In other news, the production well at Hibiscus South in the Dussafu licence has been brought on-stream. Also, BlueNord reported net production of 22.9kboed in February, at the upper end of its Q1 product...
- Steffen Evjen
Key takeaways from CEO panel at our 17th Annual Energy & Shipping Conf...
This week, we hosted our 17th Annual Energy & Shipping conference in Oslo, which included a panel discussion with the CEOs of Aker BP and Vår Energi. Addressing potential investor concerns, a key topic was the companies’ ability to sustain production long-term amid a structurally declining basin. Both CEOs highlighted that they are confident in being able to convert existing contingent resources into reserves. Moreover, both indicated intensifying exploration efforts in 2024, with a meaningful Y...
- Steffen Evjen
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