DNO: A classic buy the dip - DNB

09.02.2018 kl 08:51 8396

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A classic buy the dip

DNO was hit hard (down 10%, or NOK1.0) on its weakish Q4 results. However, with only an insignificant impact on our NAV, we consider the share price drop a particularly attractive buying opportunity.

We see continued payments from the KRG and a reserve update on the Peshkabir field as potential catalysts.

With USD430m in cash on the balance sheet, and as the shares are trading at an implied oil price of cUSD50/bbl, we expect DNO to consider doing share buybacks, which would be highly NAV accretive and share price supportive on our estimates.

Target trimmed to NOK13.0 (13.1) on weak Q4 results. Q4 EBITDA was 31% below
our expectations, and we trimmed our target price accordingly. However, we made
only minor revisions to our 2018/2019e EPS. We reiterate our BUY recommendation
Redigert 09.02.2018 kl 08:58 Arkivert