Maha Energy reported net revenues of USD 21.2m in Q2, which was 6% lower than ABGSCe at USD 22.7m and 17% lower than consensus at USD 26m. EBITDA came in at USD 15m, 13% lower than ABGSCe at USD 17m and 24% lower than consensus at USD 19m. FCF for the quarter was USD 0.3m, in line with ABGSCe of USD 1.4m. The headline P&L miss vs ABGSCe was due to a slightly lower realised oil price than we had estimated. Production was down q/q due to lower production from the Tie-field, as expected. The bigger miss vs consensus seems to be due to consensus not adjusting for lower production. We make only minor estimate revisions following the report.
High activity and increased production expected in H2 We expect the second half of the year to be more eventful for Maha, with a ramp up in production towards the end of the year driven by more wells being put into production at the Tie-field (only two wells producing in Q2) after the completion of an extensive workover program and the finalising of the new wells. For H2’22, we see an average net production of 4.32kboe/d, compared to the achieved 3.93kboe/d in H1’22. This puts our FY22 estimate at 4.1kboe/d, which is at the low end of the current guidance. On top of this, Maha is kicking off its six well drilling campaign in Oman with the mobilisation of the newly contracted rig expected by the end of September/early October. We have previously highlighted the importance this could have for Maha should the field reach its potential. We have currently not included any production from this field in our estimates.
Discounts at USD 60/bbl The NAV/sh on ABGSC oil price estimates is 24.2 and the P/NAV is 0.55x. At current levels, we estimate that Maha discounts Brent at USD 60/bbl.
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