Petrolia: Dugong Tail to be drilled in Q3 - ABG

Dugong Tail to be drilled in Q3
Molaris on hold, could add Shamu
Tax system under review

Petrolia Noco reported H1’21 EBITDAX of NOK -14m, in line with ABGSCe. Total exploration spending (exploration expenses and capitalised exploration) of NOK 130m was below our estimate of NOK 160m; combined with positive WC movement, this resulted in NIBD of NOK 72m vs. ABGSCe at NOK 120m. In nominal terms, we make only minor estimate revisions.

The Norwegian Tax system is under review. This could result in an end to the exploration tax scheme, but the net effects will likely prove muted for Petrolia Noco given the tax loss cash refund structure planned for the special petroleum tax (71.8% rate). As we have previously highlighted, there is a funding gap for Petrolia Noco that relates to its exploration ambitions and bringing Dugong closer to production. A cash flow tax could contribute to reducing the funding requirement for developing Dugong, as it would reduce the capital binding of the project. For now, we look to the existing tax regime, and estimate a NAV of NOK 2.5/sh-NOK 8.1/sh for oil prices of USD 40-80/bbl, with additional upside from exploration success at Dugong Tail and Bounty, which we estimate to have a risked value of NOK 1/sh-NOK4/sh.

Länk till analysen i sin helhet: https://www.introduce.se/foretag/petrolia-noco/Equity-research/2021/9/petrolia-noco---dugong-tail-to-be-drilled-in-q3/