Tethys Oil - Continues to deliver
Another quarter with good production We are ~26% above cons on Q1 revenues Discounts oil at ~USD 50/bbl Q1 up on oil price and strong production Tethys Oil continues to deliver strong volumes, with Q1’21 averaging 11,586 bbl/d, according to monthly production updates. We estimate revenues of USD 26. 6m, ~26% above FactSet cons. of USD 21.
2m. Our EBITDAX of USD 13. 0m is well above FactSet consensus at USD 8.
6m. We also raise our estimates for 2021 to account for the ABGSCe oil price estimate of USD 64. 1/bbl, up from the previous estimate of USD 58/bbl.
We like the increased exploration focus We believe that Tethys Oil’s ongoing transition from a one-asset producing oil company to a broader exploration and production company offers interesting exposure. No flows were recorded at the surface from the Thameen-1 exploration well, which was not an immediate success; however, we like the exploration license accumulation as well as the risk management from farm-downs limiting the single well exposure. We expect to learn more about the Thameen-1 and subsequent exploration activities at the Q1 presentation.
Discounts oil at ~USD 50/bbl We estimate that Tethys Oil discounts a Brent oil price of USD 50/bbl (P/NAV of 1. 0x at 12% WACC). Our SOTP reflect reserves and resources identified; however, in this context it is important to keep in mind that Tethys has been successful in growing 2P reserves every year since 2011.
