Tethys Oil - Thameen-1 results are due in February
Thameen-1 results right around the corner Good RRR is key long term Discounts oil at USD 47/bbl Q4 in line, only minor revisions to ’21e-’22e Tethys Oil’s production is pre-announced in monthly production reports: for Q4 it was 11,072boe/d. The Q4 P&L was in line with ABGSCe and FactSet consensus, with reported revenues of USD 22m (ABGSCe at USD 23m and cons. of USD 21m). EBITDA of USD 10m compares with ABGSCe at USD 10m and cons.
at USD 9m. We make only minor adjustments to our ’21 and ’22 estimates. Good organic development, and near term exploration kicker Tethys Oil was once again able to deliver robust organic growth, with RRR of 120% for 2020, meaning that the 2P reserves added will more than cover the barrels produced.
This is essential for the company, which has grown its reserves continuously since 2011. An important near term factor for the organic growth potential in the portfolio is the Thameen-1 exploration well on Block 49, where results are expected before the end of February. EOG is the farmed-in partner on the block, which is located close to the Saudi Arabian border.
A positive exploration result could spur a new development opportunity for Tethys. Discounts oil at USD 47 Following increased 2P reserves, we make 6% positive revisions to our SOTP. At the ABGSCe oil price we estimate a SOTP of 78/sh.
We find that at the current share price an oil price of USD 47/bbl is discounted. At the DPS of SEK 4 for ’21 Tethys offer a dividend yield of ~6. 8%, with a robust balance sheet of SEK 16/sh in net cash at YE’21e.
