Maha Energy
Maha Energy - Soft ending to 2020 (ABG Sundal Collier)
2021-02-26 18:14
Soft Q4 on higher costs
Should not be extrapolated
Discounts oil at USD 48/bbl
Higher costs in Q4Q4 was challenging for Maha Energy. On production challenges, the volumes came in at 2.7kboe/d, down 24% q-o-q, in line with monthly production reports and ABGSCe at 2.7kboe/d. While production was soft, the costs were higher than anticipated, as unit opex increased from USD 7.3/boe in Q3’20 to USD 12.3/boe Q4’20, and higher SG&A increased from USD 1.4m in Q3’20 to USD 2.5m in Q4.
Modest estimate revisions
We find that the higher Q4 costs are mostly one-off in nature. We therefore make only modest estimate revisions for 2021-2022. We now estimate 2021 production of 4.7kboe/d (down from 5kboe/d) within the 4.0-5.0kboe/d guidance range, and spending largely in line with guidance (capex of USD 26m and opex of USD 7.8/boe vs guidance of USD 26m and USD 7-8/boe, respectively).
Discounts oil at USD 48/bbl
On our estimates, Maha discounts an oil price of USD 48/bbl. With oil at USD 58/bbl for ’21 and USD 60/bbl for ’22, we estimate a P/E in the low single digits. Looking ahead, we see performance in accordance with company guidance, as well as a refinancing of the SEK 300m bond, as the most important for the company.
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