Q1 numbers was in line

Dome acquisition included in estimates

USD 40/bbl discounted, low multiples

Q1 was in line
Maha Energy’s Q1 report was much in line with our estimates, with production of 3,288boe/d (ABGSCe 3,278boe/d), net sales at USD 9.7m (ABGSCe USD 9.5m) and EBITDA of USD 6.4m (ABGSCe USD 6.0m). We make only modest estimate revisions to the legacy Maha portfolio after the Q1 report.

Dome acquisition included in estimates
We now include the Illinois Basin assets (2.9mill boe of 2P reserves, Q1 production of 160boe/d) that Maha Energy acquired from Dome for USD 4m in our estimates. Given the current oil price environment and consequently limited capital outlay/room for production growth, we find a modest contribution to our production estimates in the near-term. For the longer term, we find the transaction accretive assuming a small increase in oil prices from current levels. If oil prices recover, with the WTI being stable in the mid-40s, we expect that Maha can ramp-up production to a run-rate of 12 wells per year.

~USD 40/bbl appears discounted
We estimate that Maha discounts an oil price in the range of USD 40/bbl. On our oil price estimates (USD 43/bbl in ’21) we find a P/E of 5.5x, and a double-digit FCF yield. On our oil price estimates, we estimate only a low-single-digit refinancing gap when the ~USD 30m (SEK 300m) bond matures, in ’21. We think this is manageable either through refinancing or a change in the timing of capex.

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