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Maha Energy: Slower production ramp-up impacts Q3 - ABG

Higher oil price assumptions...
…but slower production ramp-up
Discounts oil at USD 52/bbl

We raise our ’22e-‘23e oil price forecast to USD 76 (65) and USD 70 (60) on 1) higher oil demand estimates, 2) OPEC+ maintaining discipline and 3) falling global spare capacity. Higher oil prices in isolation result in significant positive EBITDA estimate revisions of 7%, 14%, 24%, and 24% for Q3’21e, ‘21e, ’22e, and ’23e, respectively.

We estimate that Maha discounts oil at around USD 52/bbl. However, since the COVID-19 outbreak, there has been a worrying trend of Maha lowering guidance on several occasions, which we suspect has reduced investor confidence. We think Maha will have to start beating company guidance in order to fully regain traction.
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