Tethys Oil - Q4 set to be a good quarter (ABG Sundal Collier)
2021-01-21 07:27
Estimates up on strong Q4 production, ’21e oil price
Exploration well currently drilling
Discounts oil price of USD 50/bbl
Strong Q4 production and oil priceWe raise our estimate on another quarter of production being permitted to exceed the Omani government’s indicated cap of 9,300 boe/d (WI). Based on monthly production reports, Tethys’ working interest production was 11,072boe/d, representing a ~19% hike in production, and the quarter saw the oil price come close to ABGSCe (USD 44/bbl vs. ABGSCe USD 45/bbl). These are the key factors driving our Q4 revisions. For 2021, we raise our estimates due to higher oil price assumptions of USD 58/bbl (USD 50/bbl).
Exploration well currently underway
The Thameen-1 exploration well was spudded on 4 January. Drilling operations are expected to take 45 days, meaning that results should be available around/shortly after the Q4 report on 9 February. Tethys is the operator on the well, and could potentially be a play opener on Block 49, in our view. US-based company EOG, a large player within US shale operations, is a 50% partner to Tethys Oil.
Share up >50% since November
The share is up >50% since November on the back of the recovery in oil prices. According to our estimates, the share now trades at a P/E ‘21e of ~6x, while an oil price of USD 50/bbl is discounted in our SOTP; we also note that Tethys’ balance sheet is robust, with a net cash position of SEK 13/sh at Q4’20e.
- Läs mer på Introduce
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
research@abgsc.com (Introduce.se)
ABG Sundal Collier - Introduce.se