Tethys Oil - Another year with good reserve replacement
Q4 numbers much in line with expectations Another year with RRR 100% Proposed DPS of SEK 4 implies 6. 9% dividend yield Q4 number much in line with expectations Tethys Oil’s production is pre-announced in monthly production reports, for Q4 the production was 11,072boe/d. The Q4 P&L was in line with ABGSCe and consensus, with reported revenues of USD 22m, ABGSCe at USD 23m and cons. of USD 21m, EBITDA of USD 10m compares to ABGSCe at USD 10m and cons.
at USD 9m. FCF of USD 9m was better than ABGSCe at USD 3m due to lower than anticipated capex for the quarter. For 2021 Tethys guides capex of USD 47m, a notch above ABGSCe of USD 43m, i.
e we interpret the better FCF as timing related. Another year with RRR 100% Tethys reports a reserve replacement ratio of 120% for 2020. It has reported RRR 100% every year since 2012, and the ability to continuously replace produced volumes is in our view positive for the company.
There is no new update on the progress on the Thameen-1 exploration well, results are expected end of February. Proposed DPS of SEK 4, implies 6. 9% dividend yield Tethys propose a DPS for 2021 of SEK 4 (before buybacks), down from SEK 5 in '20, in line with ABGSCe at SEK 3.
8. the SEK 4 DPS imply a 6. 9% dividend yield.
The DPS could be viewed as conservative taking into account that the company holds a balance sheet of SEK ~14/sh net cash. Our initial impression from the Q4 report is that we do not expect to see significant near/medium term estimate revisions expected from consensus. Tethys Oil will host a conference call today at 10:00 CET.
