Maha Energy - Refinancing in place
Debt refinancing secured USD 60m bank debt and 6. 83% private placement We are below consensus on Q1’21e Refinancing in place Maha has now been able to refinance its SEK 300m (USD ~36m) bond that matures on 29 May 2021 through a gross USD 60m term loan and a USD 10m private placement with the Brazilian bank BTG Pactual. In our view, this reduces the balance sheet risk significantly, and it provides Maha with the financial flexibility to undertake its growth ambitions. Q1’21e production of 3,740boe/d For Q1’21, we estimate that Maha will report a net production of 3,740boe/d, based on ANP production data for Brazil and the 200boe/d exit rate for Illinois Basin.
The latest company-communicated production rate was the total company 2020 exit rate of 4,112boe/d. We estimate revenue of USD 13. 7m and an EBITDAX of USD 8.
3m. This leaves us shy of consensus, which has revenues of USD 14. 1m and EBITDAX of USD 9.
3m. For 2021, we raise our estimates to reflect ABGSC’s 64/bbl Brent oil assumption (USD 58/bbl). USD 48/bbl discounted On our estimates, Maha discounts an oil price of USD 48/bbl (P/NAV 1.
0x, assuming a 15% WACC). This compares to a spot oil price of USD ~65/bbl and ABGSC’s long-term oil price estimate of USD 60/bbl. In our view, the successful refinancing of the SEK 300m bond that was set to mature in May greatly reduces the balance sheet risk, and Maha should be well financed to proceed with its growth ambitions.