We estimate Maha Energy’s Q4 production to be 3.2kboe/d, based on ANP production data for Tie and Tartaruga, as well as a gradual improvement in the Illinois basin. This is a decline of 12% sequentially, driven primarily by Tie. We estimate Q4’21 EBITDAX of USD 12m, with a slightly positive FCF for the quarter.
Working on re-setting expectations
January production data for Brazil shows a net production of 3,896boe/d, up 37% vs. the average for Q4 at 2,852boe/d. Our take is that Maha is off to a good start this year after what we estimate was a soft Q4. After a series of negative guidance revisions, the work of re-setting expectations and restoring confidence is ongoing. For ’22, Maha guides for capex of USD 47m, with a focus on Tie. The production guidance sits at 4,000-5,000boe/d, and our revised estimates sit in the middle of that range, at 4,436boe/d. This is a meaningful revision from previously expected levels and drives our negative estimate revisions.
Share discounts Brent at USD 58/bbl
The Maha share has already been repriced and at current levels we estimate that Maha discounts Brent at USD 58/bbl. We think delivering on guidance will be crucial to regain confidence in the market, and that this will be required in order for a positive repricing of the share.
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