Petrolia Noco: Brage builds momentum into 2026 - ABG
* Strong A15 contribution, ’26e production up ~20% * Recent Brage updates imply ~NOK 0.35 uplift to NAV * Fair value range NOK 1.1-4.5
ANNONS
Q4 production 2.1 kboe/d vs. ABGSCe 2.2 kboe/d
Q4'25 production was 2.1 kboe/d vs. ABGSCe 2.2 kboe/d, driven by slightly lower efficiency due to drilling the A15 well, which came on stream in Jan. EBITDA was USD 62m vs. ABGSCe of USD 77m, driven by higher costs despite the lower production, mainly caused by a change in over/underlift (a timing effect that evens out over time). PNO exited Q4 with a cash position of USD 74m, and we expect USD 166m at the end of Q1.
Tallisker upgrade and discovery add ~NOK 0.35 to our NAV
Based on January and February production updates from Lime Petroleum (34% interest in Brage), we know that the initial production contribution from the A15 well has been significantly higher than expected. This prompts us to lift ’26e production by ~20%. As we have not updated our oil price deck since the outbreak of the Iran conflict, we apply the forward curve for ’26e-’28e, while reiterating our long-term oil price assumption of USD 75/bbl thereafter. This lifts ’26e EBITDA by ~50%, while revisions to ’27e-’28e are more modest. Importantly, OKEA (operator on Brage) last week announced that estimated recoverable resources at Tallisker have increased from 16-33 mmboe to 23-44 mmboe. Additionally, a discovery at Knockando Fensfjord of 3.1-9.4 mmboe (if oil) or 2.5-5.7 mmboe (if gas) was announced in January. All else equal, these events lift our NAV by ~NOK 0.35/sh. We expect drilling at Tallisker to commence during H2’27, but keep this outside our estimates for now.
Fair value range of NOK 1.1-4.5/sh
Assuming a long-term Brent price of USD 50-100/bbl, we estimate a NAV of NOK 1.1-4.5/sh for PNO. We argue that the current share price of NOK 2.1 implies a discounted oil price of USD 64/bbl.
