Source: Stephane Foucaud (11/17/23)
Stephane Foucaud at Auctus Advisors sees over 90% upside for Panoro Energy based on increased reserves, new exploration potential, and improving fundamentals.
Norway-based Panoro Energy ASA (PEN:OSE; 1PZ:FRA) provided an operational update highlighting increased reserves and new exploration upside across its African oil assets, noted Auctus Advisors in a November 17 research report.
Analyst Stephane Foucaud reiterated a Buy rating and NOK$50 price target on Panoro Energy.
Expanded Resource Estimates in Gabon
According to Foucaud, the operator of Panoro’s Dussafu permit offshore Gabon now estimates 10 million barrels of oil in place above initial expectations, adding 4-5 million barrels of recoverable resources.
This is in addition to the recent 6-7 million barrel discovery at Hibiscus South, both driving increased reserve potential.
New Exploration Prospects Identified
Panoro also plans to drill the 29 million barrel Bourdon exploration prospect on the Dussafu permit. The company sees further upside at its Ceiba field in Equatorial Guinea and added the Akeng Deep prospect.
The analyst believes these opportunities, along with expanded reserves, support his unchanged valuation.
Production Impacted by Temporary Issues
While Panoro produced 10,000 barrels per day in Q3, exceeding estimates, short-term electrical submersible pump (ESP) problems temporarily impacted the Dussafu wells.
This will defer some production to late 2023 and early 2024 before new wells boost output.
Significant Upside Based on Improving Fundamentals
Auctus’ NOK$50 price target implies over 90% upside potential for Panoro Energy. The firm’s valuation is based on increasing reserves, new exploration prospects, and attractive EV/DACF multiples.
In summary, the analyst sees the company’s expanded resources and lower leverage supporting significant share price appreciation.
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Disclosures for Auctus Advisors, Panoro Energy ASA, November 17, 2023
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