Q2 2026 Panoro Energy ASA Earnings Call Transcript
Key Points
- Panoro Energy ASA (PESAF) announced a transformational acquisition of a 9.09% interest in Block CI-27 offshore Ivory Coast, adding a fourth production leg and diversifying its portfolio into a new, first-class jurisdiction.
- The acquisition is fully derisked with no regulatory approvals or preemptive rights required, and completion is expected by end of Q3 2026.
- The CI-27 asset provides stable, long-term cash flows with a take-or-pay gas sales agreement at a minimum fixed price of $6 per MMBtu, currently around $6.50, and a contract term to 2034.
- The company's production is at a record level of 17,500 BOE per day, and on a pro forma basis including the CI-27 acquisition, it exceeds 20,000 BOE per day, with a target of 23,000 BOE per day by 2027.
- Panoro Energy ASA (PESAF) has a strong track record of accretive M&A, having increased 2P reserves by more than four times and 2P plus 2C resources by almost eight times since 2018, while consistently returning capital to shareholders.
- The acquisition of the CI-27 interest will be funded partly by issuing 7 million new shares to DNO, which will dilute existing shareholders by about 4.9%.
- The company placed a $50 million senior unsecured bond with a high 10.25% coupon, increasing its debt burden and interest costs.
- The CI-27 asset has a relatively low net production of 3,334 BOE per day for the 9.09% interest, and the acquisition price of $80 million implies a payback period of around 3.5 to 4 years based on annual free cash flow of $17-20 million.
- The company's operating costs are relatively high at $23 per barrel, and when including non-recurrent CapEx, total costs rise to $26-28 per barrel, which could pressure margins in a low oil price environment.
- The company's IFRS results for the first half were impacted by timing differences in liftings, leading to lower revenue compared to the previous period, and the full benefit of the Block G acquisition will only be reflected in the second half of 2026.
Good morning, and welcome to Panoro's half one results presentation. I would first like to draw your attention to this disclaimer.
This presentation contains certain statements that are or may be deemed to be forward-looking statements, which include all statements other than statements of historical fact. Forward-looking statements involve making certain assumptions based on the company's experience and perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances.
Although we believe that the expectations reflected in these forward-looking statements are reasonable, actual events or results may differ materially from those projected or implied in such forward-looking statements due to unknown or known risks, uncertainties and other factors.
Next slide, please. There will be time for Q&A at the end of the presentation. (Operator Instructions) I would now like to hand you over to Julien Balkany, Panoro's Chairman,
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