Maha Energy - Soft ending to 2020
Soft Q4 on higher costs Should not be extrapolated Discounts oil at USD 48/bbl Higher costs in Q4 Q4 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.
