We make only modest revisions to our estimates after Q4. The opex guidance of USD 12/bbl was slightly higher than our estimates, and we now reflect the guidance. Our ’22 production estimate remains at 11.6kboe/d, slightly above the guidance of 11-11.5kboe/d, as we find the guidance to be somewhat cautious.
Pursuing growth in ’22 after soft RRR for ’21
Tethys will pursue growth in 2022, after a period of reduced investments resulting in a ’21 reserve replacement of 82%, meaning that the company has (for the first time) not replaced the volumes produced. A total of USD 91m will be invested in ’22, USD 62m of which is to support production from Blocks 3 & 4, while the 3 well drilling programme on Block 56 will hopefully open the block for development. Success here could result in upside to our estimates, and might potentially facilitate future growth.
Discounts oil around USD 55/bbl, ~11% divi yield
We estimate that Tethys Oil discounts an oil price of USD 55/bbl. The SEK 7/sh dividend planned for ’22e implies a dividend yield of ~11%, and we estimate that the company will have a further SEK 14/sh in net cash at YE’22.
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