* Strong Q3 production of 2.9kboe/d vs. ABGSCe 2.4kboe/d * '26e EBITDAX up 3% on higher Brage production * Fair value range of NOK 1.2-4.5/sh Q3: EBITDA NOK 122m vs. ABGSCe 85m due to overlift effect Q3 production was 2.9kboe/d vs. our estimate of 2.4kboe/d and 1.9kboe/d in Q2. The increase from Q2 was driven by the new Sognefjord East well, which commenced production on 30 June with a strong initial production rate. As a result, PNO reported revenue of NOK 169m, 6% above ABGSCe of NOK 160m. EBITDA of NOK 122m was significantly above ABGSCe of NOK 85m, but primarily driven by an overlift effect. PNO sells a significant portion of its volumes through a monthly sales contract. When it lifts more volumes under this agreement than its entitlement, it records the gain on a net basis under opex, which resulted in net production costs of NOK 25m vs. our estimate of NOK 45m. Hence, this effect should even out over the next quarters. PNO exited Q3 with a cash position of NOK 22m, vs. NOK 26m in Q2, and we expect a cash position of ~NOK 40m at end of Q4. We raise '25e-'26e EBITDAX by 5-3% We raise our '26e Brage production estimate from 2.0 kboe/d to 2.2 kboe/d, reflecting a higher expected contribution from the ongoing drilling of a new well (A15), with production start expected in Q1'26. We also highlight the new discoveries at Talisker in Q2, adding ~NOK 0.75/sh to our NAV (see p. 5). The positive underlying revisions are partly offset by applying our latest oil market view as described in Oil price could be troughing, reiterating our long-term oil price forecast of USD 80, while lowering our '26 Brent assumption to USD 70 (73) and USD/NOK to 10.0 (10.5). In summary, we lift '25e-'26e EBITDAX by 5-3%. Fair value range of NOK 1.2-4.5/sh We estimate a NAV of NOK 4.1/sh for PNO and assess a fair value range of NOK 1.2-4.5/sh. Working backwards from the current share price of NOK 1.30/sh, we argue that, all else equal, this implies a discounted oil price of USD 47/bbl.
