Please refer to important disclosures at the end of this report This research product is commissioned and paid for by the company covered in this report. As such, this report is deemed to
constitute an acceptable minor non-monetary benefit (i.e. not investment research) as defined in MiFID II.
Maha Energy
Reason: Initiating coverage
Company sponsored research
Not rated
Production blossoming
E&P producing 3.2kboe/d from 41.8mill boe 2P reserves
Strong growth backed by robust capital structure
NAV: SEK 32.8/s at USD 65/b, SEK 16.2/s at USD 45/b
E&P with 3.2kboe/d production and 41.8mill boe 2P reserves
Maha Energy is an oil and gas producer with 41.8mill boe of 2P reserves.
It operates two fields in Brazil, Tie and Tartaruga, with combined net
production of 3.2kboe/d, and has minor operations from the LAK field in
the US. The company strategy is a combination of production, pursuing
portfolio upside through production drilling/appraisal and some modest
near-field exploration activity. Simultaneously, Maha Energy is seeking
further growth through M&A opportunities with a broad mandate focusing
on onshore oil and gas – predominantly producing or near production.
Strong growth backed by robust capital structure
Maha has invested USD 42.6m in its Brazil operations since it acquired
the assets in 2017. The majority of the infrastructure investments have
been done, and future investments are expected to have a direct
production effect. Since the assets were acquired, production has
increased from 1.6kboed/d to 3.2kboe/d in Q4’19. We estimate that the
company could reach plateau production of 6.7mboe/d by 2023. We
estimate USD 64m of capex to reach plateau. We find that Maha has a
robust capital structure, with NIBD of USD 8.2m at Q4’19. At USD 65/bbl
oil we estimate USD 232m (SEK 20.5/sh) of FCF ‘20e-‘23e, while at flat
USD 45/bbl we estimate FCF of USD 103m (SEK 9.1/sh) for the same
period.
NAV: SEK 32.8/s at USD 65/bbl, SEK 16.2/s at USD 45/bbl
We find that smaller listed E&P companies in the Nordics trade at P/NAV
of 0.3-0.6x (based on ABGSCe NAV with USD 65/bbl oil price
assumption). Assuming Brent at USD 65/bbl, we estimate a NAV of SEK
32.8/share which implies a P/NAV of 0.40x. Assuming a USD 45/bbl oil
price, we estimate a NAV of SEK 16.2/share. Testing NAV sensitivity to
oil prices or production, we find that a 15% reduction to our USD 65/bbl
Brent oil price assumption has a 25% negative impact on NAV, while a
20% reduction to our production profiles have a 29% negative impact on
our NAV.
06/03/2020
Performance
Equity Research - 09 March 2020 06:47 CET
USDm 2016 2017 2018 2019 2020e
Sales 0 12 33 48 67
EBITDA 0 3 22 35 52
EBITDA margin (%) nm 27.4 67.2 72.8 77.5
EBIT adj 0 1 19 29 44
EBIT adj margin (%) nm 10.6 55.9 61.1 64.8
Pretax profit 0 -3 15 25 39
EPS rep 0 -0.03 0.25 0.18 0.31
EPS adj 0 -0.03 0.25 0.18 0.31
Sales growth (%) na na 168.1 44.4 39.5
EPS growth (%) na high 895.1 -28.3 69.0
Source: ABG Sundal Collier, Company data
Lead analyst: Karl Fredrik Schjøtt-Pedersen
Eirik Thune Øritsland
Share price (SEK) 13.0
Oil & Gas Exploration & Production, Sweden
MAHAA.ST/MAHAA SS
MCap (SEKm) 1,304
MCap (EURm) 123.1
Net debt (EURm) -18
No. of shares (m) 100
Free float (%) 94.2
Av. daily volume (k) 9.9
Next event Q1 report: 26 May
50
100
150
200
250
300
350
400
450
500
Mar
17
May
17
Jul 1
7
Se
p 1
7
No
v 17
Jan
18
Mar
18
May
18
Jul 1
8
Se
p 1
8
No
v 18
Jan
19
Mar
19
May
19
Jul 1
9
Se
p 1
9
No
v 19
Jan
20
Maha Energy OSE GI
1m 3m 12m
Absolute (%) -34.9 -33.8 -29.5
OSE GI (%) -14.3 -11.7 -10.4
Source: FactSet
2018 2019 2020e
P/E (x) 5.7 14.7 4.5
P/E adj (x) 5.7 14.7 4.5
P/BVPS (x) 2.04 3.01 1.15
EV/EBITDA (x) 6.8 7.8 2.3
EV/EBIT adj (x) 8.2 9.3 2.7
EV/sales (x) 4.57 5.66 1.77
ROE adj (%) 43.9 25.0 31.9
Dividend yield (%) 0 0 0
FCF yield (%) 3.1 0.6 18.8
Lease adj. FCF yld (%) 3.1 0.6 18.8
Net IB debt/EBITDA 0.5 0.2 -0.4
Lease adj. ND/EBITDA 0.5 0.2 -0.4
Maha Energy
9 March 2020 ABG Sundal Collier 2
Oil price estimates (Brent USD/bbl)
Sundal Collier, Company data
Business area breakdown, sales, USDm
Sundal Collier, Company data
Quarterly sales and adj. EBIT, USDm
Sundal Collier, Company data
OpportunitiesContingent on positive results from testing operations, and
an expected renew al of the Tartaruga Block concession, a
full f ield development could increase the commercial lifetime
of the field and utilisation of the reservoir. With its robust
capital structure, the company is also w ell-positioned for
more M&A to diversify its operations. Also, Lak Ranch is not
included in our valuation, providing interesting opportunities
for our estimates.
RisksMaha Energy is exposed to adverse changes in oil and gas
prices. The functional currencies are USD, SEK and BRL,
w hile the trading currency is SEK, i.e. it is exposed to
adverse currency fluctuations. The company is also
exposed to its contractors’ ability to execute projects
according to the schedule and on budget, including
infrastructure in place and offtake capacity, w ith limited
diversif ication betw een assets. Operating in several
countries, w ith various political and regulatory regimes, the
company is exposed to adverse changes in regulatory and
political regimes.
5052
61
67
74 75
6863
69
62 63
5860
65 65 65 65 65 65 65
0
10
20
30
40
50
60
70
80
Q2
17
Q3
17
Q4
17
Q1
18
Q2
18
Q3
18
Q4
18
Q1
19
Q2
19
Q3
19
Q4
19
Q1
20
e
Q2
20
e
Q3
20
e
Q4
20
e
Q1
21
e
Q2
21
e
Q3
21
e
Q4
21
e
Q1
22
e
0
10
20
30
40
50
60
70
Tie Tartaruga
Sales
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
0
5
10
15
20
25
quarterly sales quarterly adj. EBIT
Company descriptionMaha Energy is an oil and producer operating tw o fields in
Brazil (Tie and Tartaruga). It has minor operations in the LAK
field in the US. Its strategy is a combination of production,
pursuing upside in its portfolio from production drilling and
appraisal, and modest near-f ield exploration activity. It also
looks for grow th through M&A w ith a broad mandate,
focusing on onshore oil and gas. Its main operation is
enhanced oil recovery (EOR) through the development of
proven hydrocarbon reserves.
Maha Energy
9 March 2020 ABG Sundal Collier 3
Contents Maha in brief ................................................................................................ 4
Estimates ..................................................................................................... 6
Company history ........................................................................................ 10
Company assets ......................................................................................... 11
Company strategy ...................................................................................... 15
Sensitivity analysis ..................................................................................... 16
Country résumé .......................................................................................... 20
Oil market outlook ...................................................................................... 23
Key oil market estimates ............................................................................ 25
Fiscal terms ................................................................................................ 29
Management .............................................................................................. 30
Board of Directors ...................................................................................... 31
Shareholder structure ................................................................................. 32
Main risks ................................................................................................... 33
Maha Energy
9 March 2020 ABG Sundal Collier 4
Maha in brief
Maha Energy is an oil and gas producer with 41.8mill boe of 2P reserves. It
operates two fields in Brazil, Tie and Tartaruga, with combined net production of
3.2kboe/d, and has minor operations at the LAK field in the US. The company
strategy is a combination of production, pursuing portfolio upside through production
drilling and appraisal and some modest near-field exploration activity.
Simultaneously, Maha Energy is seeking further growth through M&A opportunities
with a broad mandate focusing on onshore oil and gas – predominantly producing or
near production. The company’s main operations involve enhanced oil recovery
(EOR) through the development of proven hydrocarbon reserves, limiting
exploration and reservoir risks. This strategy has proven successful on the Tie field,
where production increased from 1,339boe/d to 2,814boe/d since the acquisition in
Q2’17.
2P reserves by field (mmboe) as of YE 2019
Source: ABG Sundal Collier, company data
Net production by field
Source: ABG Sundal Collier, company data
Maha has invested USD 42.6m in its Brazil operations since it acquired the assets
in 2017. The majority of the infrastructure investments have been done, and future
investments are expected to have a direct production effect. Since the assets were
acquired, production has increased from 1.6kboed/d to 3.2kboe/d in Q4’19. We
estimate that Maha could reach plateau production of 6.7kboe/d within 2023, and
estimate USD 64m of capex to reach plateau. This growth is supported by what we
deem a robust capital structure, with NIBD of USD 8.2m at Q4’19. At USD 65/bbl oil
we estimate USD 232m (SEK 20.5/sh) of FCF ‘20e-‘23e, while at flat USD 45/bbl we
estimate FCF of USD 103m (SEK 9.1/sh) for the same period.
We find that smaller listed E&P companies in the Nordics trade at P/NAV of 0.3-
0.6x. Assuming Brent at USD 65/bbl, we estimate a NAV of SEK 32.8/share which
implies a P/NAV of 0.40x. Assuming a USD 45/bbl oil price, we estimate a NAV of
SEK 16.2/share. Testing NAV sensitivity to oil prices or production, we find that a
15% reduction to our USD 65/bbl Brent oil price assumption has a 25% negative
impact on NAV, while a 20% reduction to our production profiles have a 29%
negative impact on our NAV.
Tie f ield, 19.818, 47%
Tartaruga, 13.200, 32%
LAK Ranch, 8.815, 21%
910
1,803
3,041
4,334
5,819
6,4376,761 6,520
6,2636,068
5,473
4,545
3,775
3,135
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
boe/d
Tie field Tartaruga LAK Ranch
910
1,803
3,041
4,334
5,819
6,4376,761 6,520
6,2636,068
5,473
4,545
3,775
3,135
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
boe/d
Tie field Tartaruga LAK Ranch
Maha Energy
9 March 2020 ABG Sundal Collier 5
NAV sensitivity to different oil prices
Source: ABG Sundal Collier, company data
NAV sensitivity to production deviations (based on USD 65/bbl oil price)
Source: ABG Sundal Collier, company data
Maha Energy NAV year-end 2020 USD 45 USD 50 USD 55 USD 60 USD 65 USD 70
WI
Producing assets
Tie field 100% 12.4 15.0 17.5 20.0 22.5 25.0
Tartaruga 75% 4.0 5.1 6.3 7.4 8.4 9.5
LAK Ranch 99% 0.0 0.0 0.0 0.0 0.0 0.0
Core GAV 16.3 20.1 23.7 27.4 31.0 34.5
NIBD YE 2020 -0.1 0.4 1.0 1.5 2.1 2.6
Core NAV 16.2 20.5 24.7 28.9 33.0 37.1
P/NAV 0.8x 0.6x 0.5x 0.5x 0.4x 0.4x
Oil price sensitivity (Brent)
SEK/sh
Maha Energy NAV year-end 2020 -10% -15% -20% -25% -30%
WI
Producing assets
Tie field 100% 19.7 18.3 16.9 15.5 14.1
Tartaruga 75% 7.1 6.5 5.8 5.1 4.4
LAK Ranch 99% 0.0 0.0 0.0 0.0 0.0
Core GAV 26.9 24.8 22.7 20.6 18.5
NIBD YE 2020 1.2 1.0 0.7 0.4 0.1
Core NAV 28.1 25.8 23.4 21.0 18.6
P/NAV 0.5x 0.5x 0.6x 0.6x 0.7x
Production deviation
SEK/sh
Maha Energy
9 March 2020 ABG Sundal Collier 6
Estimates
This section shows a summary of our key estimates and assumptions. The
underlying assumptions are discussed in more detail in the “company assets”
chapter.
Production estimate
The company plans for a significant increase in production towards plateau. We
estimate average production of 6,761 boe/d in 2023 as the Tartaruga field reaches
plateau, and a 17% depletion thereafter until reserves are uncommercial.
Production
Source: ABG Sundal Collier, company data
2P reserves
Source: ABG Sundal Collier, company data
Cost estimates
We estimate production costs of around USD 6/boe. The capex estimates reflect the
cost to maintain the projected production, including modest abandonment costs.
Cost of operations
Source: ABG Sundal Collier, company data
Capex
Source: ABG Sundal Collier, company data
910
1,803
3,041
4,334
5,8196,437
6,761 6,5206,263
6,0685,473
4,545
3,775
3,135
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
b/d
Net liquids boe/d Net Gas (boe/d)
13
27
3433
4240
3836
3331
2926
2423
2120
0
5
10
15
20
25
30
35
40
45
mm
boe
13
27
3433
4240
3836
3331
2926
2423
2120
0
5
10
15
20
25
30
35
40
45
mm
boe
6 7
9
11
1314
1413
1312
11
109
0
2
4
6
8
10
12
14
-
2
4
6
8
10
12
14
US
D/b
oe
US
Dm
Opex (Left hand axis) Unit production costs (Right hand axis)
16
28
19
2322
6
12 12 12
6 6 6 6
-
3
5
8
10
13
15
18
20
23
25
28
30
US
Dm
Maha Energy
9 March 2020 ABG Sundal Collier 7
Price realisation
The historical achieved discount to Brent is approximately USD 7/bbl. The discounts
rely on agreements with off-takers based on delivered volumes. The chart below
shows our estimates for oil price realisation. Note also that in the scenario testing,
discounts are assumed to be fixed while the reference price is changed.
Financials
We estimate the production increase to generate accumulated free cash flow of
USD 232m throughout 2023 assuming a USD 65/bbl oil price. The main driver for
the strong FCF outlook is a combination of material investments completion,
combined with a higher production base.
Revenues1 and EBITDA estimates
Source: ABG Sundal Collier, company data
Cash flow
s
Source: ABG Sundal Collier, company data
1 Revenues after royalties.
12
33
48
67
94
105110
107102
98
88
74
61
51
3
22
35
52
77
8691
8783
80
71
57
45
36
0
20
40
60
80
100
120
US
Dm
Revenue EBITDA
2
18
29
48
76
86
91
80
6259
53
43
34
26
-34
3 0
28
53
65
85
69
5148
47
37
2820
2
16
28
1923 22
612 12 12
6 6 6 6
-40
-20
0
20
40
60
80
100
US
Dm
Cash flow from operations Free cash flow Capex
2
18
32
65
81
9395
72
6259
53
43
34
26
-34
39
43
6875
93
64
5552
51
41
32
2416
23 22
1318
28 8 8
2 2 2 2
-40
-20
0
20
40
60
80
100
US
Dm
Cash flow from operations Free cash flow Capex
Realised oil price and Brent
Source: ABG Sundal Collier, company data
5651
43
52
60
6668
61
56
61
55 5451 53
58 5854
50
52
61
67
75 75
6863
69
62 63
58 6065 65
0
10
20
30
40
50
60
70
80
US
D/b
bl
Oil realised price (USD/bbl) Reference price, avg. Brent (USD/bbl)
Maha Energy
9 March 2020 ABG Sundal Collier 8
Capital structure
As at YE’19, the NIBD was 8.2m. The company has a SEK 300m (USD 31m) bond
outstanding of 12% semi-annual interest with maturity in 2021. In addition to a
minimum cash component of USD 5m, covenants include NIBD below, or equal to,
3x EBITDA, and ICR above 2.25x, on a 12-month rolling basis. The company has a
sound capital structure, which is estimated to improve further as the Tie field
matures.
Debt
Source: ABG Sundal Collier, company data
Credit metrics
Source: ABG Sundal Collier, company data
31 33 33 32 30 31 31 30 30 29 31 31 31 31 31 31
1814
11 9 10 911 10 10 8.4 8.17
3.2 2
-4
-20
-30
-45
-35
-25
-15
-5
5
15
25
35
US
Dm
Gross IB debt Net debt
1.71.0 1.2 0.8 0.6 0.7 0.5 0.4 0.5 0.2 0.1
-0.1 -0.6 -0.8
-2.8
0.6
2.7 2.8 2.84.3
6.05.3
8.37.2
5.6 6.1
8.3
12.1
15.116.1
NIBD/EBITDA EBIT/net interest
Maha Energy
9 March 2020 ABG Sundal Collier 9
Estimates table
Source: ABG Sundal Collier, company data
Maha Energy (FactSet)
New estimates Cons. Cons. Cons.
USDm Q1'19 Q2'19 Q3'19 Q4'19 Q1'20e Q2'20e Q3'20e Q4'20e 2018 2019 2020e 2021e 2022e 2020e 2021e 2022e
Income Statement
Net sales 10 12 14 12 12 14 19 22 33 48 67 94 105 94 118 114
EBITDAX 8 9 11 8 8 11 15 18 22 36 52 77 86
EBITDA 8 9 11 8 8 11 15 18 22 35 52 77 86 65 85 87
Depreciation -1 -1 -2 -1 -2 -2 -2 -3 -4 -6 -9 -11 -13 -11 -12 -20
EBIT 6 8 9 6 6 9 13 16 19 29 44 66 73 54 74 67
PTP 5 7 8 5 5 8 12 15 15 25 39 65 74 50 70 67
Tax -1 -1 -1 -2 -1 -1 -2 -2 11 -5 -6 -10 -11 -15 -21 -13
Net profit 4 6 7 3 5 7 10 12 26 20 33 55 63 35 50 54
No. of avg. shares (m), basic 98 99 99 100 100 100 100 100 98 99 100 100 100 100.1 100.1 100.1
No. of avg. shares (m), diluted 107 109 109 109 109 109 109 109 108 109 109 109
EPS (SEK), basic 0.40 0.58 0.65 0.25 0.44 0.63 0.94 1.18 1.87 3.19 5.27 6.00 3.21 4.30 4.73
EPS (SEK), diluted 0.37 0.53 0.59 0.23 0.41 0.58 0.87 1.09 1.72 2.94 4.85 5.53
Key BS and CF figures
Gross interest bearing debt 30 30 29 31 31 31 31 31 31 31 31 2 2
Gross cash 20 21 20 22 27 28 35 51 20 22 51 75 80
NIBD 10 10 8 8 3 2 -4 -20 11 8 -20 -73 -78 -19 -62 -96
NIBD/share (SEK) 1.0 0.9 0.8 0.8 0.3 0.2 -0.4 -2 1 -1.9 -7 -8
Book equity 74 82 83 88 92 99 109 121 69 88 121 176 179
Book equity/share (SEK) 7 8 8 8 9 9 10 12 8 12 17 17 12 17
Operating cash f low 7 6 10 5 7 10 14 17 18 29 48 76 86 60 80
Capex -7 -7 -9 -6 -2 -9 -7 -2 -16 -28 -19 -23 -22 -21 -20
Free cash f low 0 0 1 0 5 1 7 16 3 0 28 53 65 39 60
Free cash f low /share (SEK) 0.0 0.0 0.1 0.0 0.5 0.1 0.7 1.5 0.0 0.0 2.7 5.1 6.2
Other key figures and assumptions
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20e Q2'20e Q3'20e Q4'20e 2018 2019 2020e 2021e 2022e
Brent 63 58 60 65 65 64 62 65 65
WTI 57 53 55 60 60 0 57 60 60
Realised price/boe (USD) 52 57 51 49 46 47 52 52 59 52 49 52 53
SEK/USD 9.3 9.3 9.8 9.4 9.6 9.6 9.6 9.6 9.5 9.6 9.6 9.6 9.6 9.6 9.6
Field-by-field production (boe/d):
Tie f ield 2,516 2,632 3,171 2,814 2,814 3,377 4,052 4,862 1,718 2,783 3,776 5,062 5,062
Tartaruga Block 139 83 391 320 432 484 562 630 57 233 527 730 1,350
LAK Ranch 13 24 31 31 32 31 30 29 28 25 31 28 25
Total production 2,668 2,739 3,593 3,165 3,278 3,892 4,644 5,521 1,803 3,041 4,334 5,819 6,437
Of w hich is gas 6% 7% 8% 12% 11% 11% 12% 12% 8% 8% 12% 12% 11%
Other key figures:
Unit production costs/boe (USD) 5 6 6 7 7.0 6.4 5.8 5.3 10 6 6.1 5 6
Depreciation cost/boe (USD) 6 5 5 5 5.4 5.4 5.4 5.4 6 5 5.4 5 5
Reported tax rate -16% -10% -15% -47% -15% -15% -15% -15% 70% -20% -15% -15% -15%
Maha Energy
9 March 2020 ABG Sundal Collier 10
Company history
Maha Energy’s history is defined by M&A activities. The company was established
in 2013 through the acquisition of a 60% working interest in the LAK Ranch heavy
oil field that was increased to 99% in 2014.
Thereafter, a non-operated 50% working interest in the producing Manitou heavy oil
field in Canada was acquired. In addition, Maha Energy earned a 30% working
interest in the Marwayne field through a farm-in deal in June 2014.
The company entered into a definitive purchase and sale agreement to acquire a
37.5% working interest in the Tartaruga development block in December 2016, and
thereafter, an additional working interest in the field of 37.5% was acquired. Upon
completion of the acquisitions in early 2017, the company received operatorship in
the Tartaruga Block.
Maha Energy was listed on the Nasdaq OMX First North in July 2016, raising SEK
108m.
Within February 2017, the company entered into a purchase and sale agreement to
divest its working interest in the Manitou and the Marwayne fields in Canada.
The company then acquired the Brazil operations of Gran Tierra Energy in July
2017. The transaction included six onshore concession agreements in the
Reconcavo Basin, in addition to the Tie field.
Maha Energy
9 March 2020 ABG Sundal Collier 11
Company assets
Maha Energy’s asset base is concentrated between three fields: the Tie and
Tartaruga fields in Brazil and the LAK Ranch in the US.
Asset map
Source: ABG Sundal Collier, company data
Source: ABG Sundal Collier, company data
The company has approximately 41.8mill boe of 2P reserves. The Tie field accounts
for 47% following drilling and completion of the Attic well, which resulted in a 62%
increase in Tie field 2P reserves.
2P reserves development
Source: ABG Sundal Collier, company data
2P reserves by field (mill boe) as of YE 2019
Source: ABG Sundal Collier, company data
MT
WY
ID
WA
OR
NV
UTCA CO
AK
HI
AZNM
TX
OKAR
LA
KY
TN
MS AL GA
FL
SC
NC
VAWV
CT RI
MA
ME
VTNH
ND
SD
NE
KS MO
IA
MNWI
IL INOH
MI
NY
PA
MD
DE
NJ
LAK Ranch
Guy ana
Chile
Uruguay
Argentina
French GuianaSurinam
Boliv ia
Colombia
Venezuela
Peru
Brazil
Ecuador
Falkland Islands
Paraguay
Trinidad and Tobago
TartarugaTie
12.9
27.3
34.332.8
41.8
0
5
10
15
20
25
30
35
40
45
2015 2016 2017 2018 2019
mm
boe
Tie f ield, 19.818, 47%
Tartaruga, 13.200, 32%
LAK Ranch, 8.815, 21%
Maha Energy
9 March 2020 ABG Sundal Collier 12
Tie field The onshore Brazil Tie field accounted for approximately 89% of Maha Energy’s
total Q4’19 production, of which 87% was liquids. When Maha acquired the Tie field
in 2017, it produced 1,339 boe/d from one well (GTE-4). Water injection and the
recompletion of a shut-in well (GTE-3) increased the production to 1,718 boe/d
throughout 2018, and in Q3’19 production from the field reached 3,171 boe/d
following the completion of the Attic well, which also increased 2P field reserves
from 10.734 mmbbl to 17.735 mmbbl.
The Tie field delivers crude oil to two Petrobras terminals, Carmo and Camboata, as
well as a local refinery. The crude is sold to the Carmo terminal at a discount to
Brent of approximately USD 6.3/bbl. The first 22,680 bbl delivered per month from
the Camboata station are sold at a discount of USD 10.49/bbl, and USD 6.09
thereafter. For crude oil sold to the refinery, the discount is USD 8/bbl.
The total offtake capacity from the field is 4,850b/d, with Petrobras’ allotment of
1,850b/d for the two terminals and the local refinery receiving approval from the
Brazilian Authorities to increase refined oil products volume from 2,200b/d to
3,000b/d.
The company plans further initiatives on the field and a continued increase in
production volumes toward the total offtake capacity of 4,850 b/d, which sets the
production plateau. Maha Energy plans to drill eight additional wells of
approximately USD 5.5m per well throughout 2026 to maintain the production
plateau rate over the corresponding period. Thereafter, production from the field is
estimated to decline with a rate of approximately 17% sequentially until the
exploitation license expires in 2039.
Annual fixed costs are estimated to total over USD 4m, while variable costs mostly
relate to transportation and are estimated at USD 2.6/bbl.
Production estimates
Source: ABG Sundal Collier, company data
FCF estimates
Source: ABG Sundal Collier, company data
723
1,718
2,783
3,776
5,062 5,062 5,062 5,062 5,062 5,062
4,631
3,844
3,191
2,648
-
1,000
2,000
3,000
4,000
5,000
boe/d
Net liquids boe/d Net Gas (boe/d) Total offtake capacity (b/d)
723
1,718
2,783
3,776
5,062 5,062 5,062 5,062 5,062 5,062
4,631
3,844
3,191
2,648
-
1,000
2,000
3,000
4,000
5,000
boe/d
Net liquids boe/d Net Gas (boe/d) Total offtake capacity (b/d)
723
1,718
2,783
3,776
5,062 5,062 5,062 5,062 5,062 5,062
4,631
3,844
3,191
2,648
-
1,000
2,000
3,000
4,000
5,000
boe/d
Net liquids boe/d Net Gas (boe/d) Total offtake capacity (b/d)
2629
51
57
63
51
37 37 39
30
23
18
0
10
20
30
40
50
60
70
US
Dm
2629
51
57
63
51
37 37 39
30
23
18
0
10
20
30
40
50
60
70
US
Dm
Maha Energy
9 March 2020 ABG Sundal Collier 13
The Tartaruga Block Maha Energy owns and operates a 75% working interest (Petrobras holds 25%) in
the Brazilian Tartaruga onshore light oil field. The company has shut in its 7TTG
well due to workover programmes and associated downhole problems, resulting in
fluctuating production volumes. During Q4’19, production averaged 320 boe/d from
one well (7TTG well).
Gross handling capacity on the field is approximately 500-800b/d, but the company
plans to increase processing capacity to handle gross 2,500b/d and 500 mscf/d,
which is set to come onstream during Q2’20 upon completion of testing operations
of the MH-1 and 107D wells at the company estimated cost of gross USD 2.5m.
Maha Energy plans an incremental increase in production as capacity comes
onstream.
The Tartaruga Block concession is currently set to expire in 2025. Although
management sees a license renewal as highly probable, the investment programme
is based on the current license. Assuming that the license is not renewed, the
company plans to drill three additional wells on the field. Contingent on results from
the MH-1 wells and partner approval, the company plans to drill one well (MH-2) in
Q4’20 at the company estimated cost of gross USD 8.3m. The two remaining wells
are scheduled to be drilled in 2022 at the estimated cost of gross USD 13.5m.
Variable costs mostly relate to transportation and are estimated to total
approximately USD 5/bbl, i.e. somewhat higher transportation costs compared to
the Tie field. Annual fixed costs are estimated to total over USD 1.0m.
Crude oil from the Tartaruga Block is trucked approximately 65km and sold at a
premium to Brent of USD 0.16/bbl to Petrobras.
Production estimates
Source: ABG Sundal Collier, company data
FCF estimates
Source: ABG Sundal Collier, company data
160 57
233
527
730
1,350
1,676
1,438
1,183
988
824
684
567 471
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
boe/d
Net liquids boe/d Net Gas (boe/d) Net production capacity (boe/d)
2.73.8
3
7
22
17
13
10
8
6
4
3
0
2
4
6
8
10
12
14
16
18
20
22
US
Dm
Maha Energy
9 March 2020 ABG Sundal Collier 14
LAK Ranch Maha Energy operates a 99% working interest in the LAK Ranch heavy oil field. The
field has remained in a pre-production phase since acquisition as successful EOR
mechanisms have not been recognised. The company is working towards a full field
development using a hot water injection scheme, but remains in the pre-production
phase as the company is monitoring the effect of the injections and production
operations. As such, it is not included in our valuation, providing interesting
opportunities to our estimates. 2P reserves from the field is approximately 8.8
million barrels.
Maha Energy
9 March 2020 ABG Sundal Collier 15
Company strategy
Maha has a defined what it calls a 40:40:20 strategy. This means that it targets
balancing the risk of its asset portfolio to 40% production base, 40% appraisal work
and 20% relating to near-field exploration activities, both for the currently held, and
potential assets gained through M&A.
We like Maha Energy’s strategy of being a full-fledge E&P with a combination of
healthy production, actively pursuing portfolio upside through production drilling and
appraisal and some modest near-field exploration activity. Simultaneously, Maha
Energy is pursuing further M&A with a broad mandate focusing on onshore oil and
gas – predominantly producing or near production - while excluding some areas of
operation in which it does not have an operational edge (e.g. US shale) or where
geopolitical risk is deemed too high (e.g. West Africa and FSU).
Maha Energy
9 March 2020 ABG Sundal Collier 16
Sensitivity analysis
In this section we test the estimates on several parameters, including oil price and
production volumes.
Oil price sensitivity To test the oil price sensitivity, we estimate the FCF for different oil prices and its
corresponding impact on the NAV.
Oil price sensitivity to FCF from the Tie field
Source: ABG Sundal Collier, company data
Oil price sensitivity to FCF from Tartaruga
Source: ABG Sundal Collier, company data
0
10
20
30
40
50
60
70
80
2019 2020e 2021e 2022e 2023e 2024e
US
Dm
USD 45 USD 50 USD 55 USD 60 USD 65 USD 70
-5
0
5
10
15
20
25
30
2019 2020e 2021e 2022e 2023e 2024e
US
Dm
USD 45 USD 50 USD 55 USD 60 USD 65 USD 70
NAV sensitivity to different oil prices
Source: ABG Sundal Collier, company data
Maha Energy NAV year-end 2020 USD 45 USD 50 USD 55 USD 60 USD 65 USD 70
WI
Producing assets
Tie field 100% 12.4 15.0 17.5 20.0 22.5 25.0
Tartaruga 75% 4.0 5.1 6.3 7.4 8.4 9.5
LAK Ranch 99% 0.0 0.0 0.0 0.0 0.0 0.0
Core GAV 16.3 20.1 23.7 27.4 31.0 34.5
NIBD YE 2020 -0.1 0.4 1.0 1.5 2.1 2.6
Core NAV 16.2 20.5 24.7 28.9 33.0 37.1
P/NAV 0.8x 0.6x 0.5x 0.5x 0.4x 0.4x
Oil price sensitivity (Brent)
SEK/sh
Maha Energy
9 March 2020 ABG Sundal Collier 17
The table below shows detailed estimates for a scenario in which the oil price
remains around USD 45/bbl.
Estimates in a scenario with Brent of USD 45/bbl and WTI of USD 40/bbl
Source: ABG Sundal Collier, company data
Maha Energy (FactSet)
New estimates Cons. Cons. Cons.
USDm Q1'19 Q2'19 Q3'19 Q4'19 Q1'20e Q2'20e Q3'20e Q4'20e 2018 2019 2020e 2021e 2022e 2020e 2021e 2022e
Income Statement
Net sales 10 12 14 12 9 10 12 15 33 48 46 61 69 94 118 114
EBITDAX 8 9 11 8 5 7 8 11 22 36 31 44 50
EBITDA 8 9 11 8 5 7 8 11 22 35 31 44 50 65 85 87
Depreciation -1 -1 -2 -1 -2 -2 -2 -3 -4 -6 -9 -11 -13 -11 -12 -20
EBIT 6 8 9 6 4 5 6 8 19 29 22 33 37 54 74 67
PTP 5 7 8 5 2 4 5 7 15 25 18 32 37 50 70 67
Tax -1 -1 -1 -2 0 -1 -1 -1 11 -5 -3 -5 -6 -15 -21 -13
Net profit 4 6 7 3 2 3 4 6 26 20 15 27 32 35 50 54
No. of avg. shares (m), basic 98 99 99 100 100 100 100 100 98 99 100 100 100 100.1 100.1 100.1
No. of avg. shares (m), diluted 107 109 109 109 109 109 109 109 108 109 109 109
EPS (SEK), basic 0.40 0.58 0.65 0.25 0.20 0.29 0.41 0.55 1.87 1.46 2.60 3.04 3.21 4.30 4.73
EPS (SEK), diluted 0.37 0.53 0.59 0.23 0.18 0.27 0.38 0.51 1.72 1.34 2.40 2.80
Key BS and CF figures
Gross interest bearing debt 30 30 29 31 31 31 31 31 31 31 31 2 2
Gross cash 20 21 20 22 25 21 22 30 20 22 30 21 19
NIBD 10 10 8 8 6 9 9 1 11 8 1 -19 -17 -19 -62 -96
NIBD/share (SEK) 1.0 0.9 0.8 0.8 0.6 0.9 0.9 0 1 0.1 -2 -2
Book equity 74 82 83 88 90 93 97 103 69 88 103 130 132
Book equity/share (SEK) 7 8 8 8 9 9 9 10 8 10 12 13 12 17
Operating cash f low 7 6 10 5 4 6 7 9 18 29 26 43 50 60 80
Capex -7 -7 -9 -6 -2 -9 -7 -2 -16 -28 -19 -23 -22 -21 -20
Free cash f low 0 0 1 0 2 -3 0 8 3 0 7 20 28 39 60
Free cash f low /share (SEK) 0.0 0.0 0.1 0.0 0.2 -0.3 0.0 0.8 0.0 0.0 0.7 1.9 2.7
Other key figures and assumptions
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20e Q2'20e Q3'20e Q4'20e 2018 2019 2020e 2021e 2022e
Brent 63 45 45 45 45 64 45 45 45
WTI 57 40 40 40 40 0 40 40 40
Realised price/boe (USD) 52 57 51 49 34 34 34 34 59 52 34 34 35
SEK/USD 9.3 9.3 9.8 9.4 9.6 9.6 9.6 9.6 9.5 9.6 9.6 9.6 9.6 9.6 9.6
Field-by-field production (boe/d):
Tie f ield 2,516 2,632 3,171 2,814 2,814 3,377 4,052 4,862 1,718 2,783 3,776 5,062 5,062
Tartaruga Block 139 83 391 320 432 484 562 630 57 233 527 730 1,350
LAK Ranch 13 24 31 31 32 31 30 29 28 25 31 28 25
Total production 2,668 2,739 3,593 3,165 3,278 3,892 4,644 5,521 1,803 3,041 4,334 5,819 6,437
Of w hich is gas 6% 7% 8% 12% 11% 11% 12% 12% 8% 8% 12% 12% 11%
Other key figures:
Unit production costs/boe (USD) 5 6 6 7 7.0 6.4 5.8 5.3 10 6 6.1 5 6
Depreciation cost/boe (USD) 6 5 5 5 5.4 5.4 5.4 5.4 6 5 5.4 5 5
Reported tax rate -16% -10% -15% -47% -15% -15% -15% -15% 70% -20% -15% -15% -15%
Maha Energy
9 March 2020 ABG Sundal Collier 18
Production sensitivity Production from the Tie field declined during Q4’19 following commissioning work,
restricted deliveries due to a three-day Petrobras strike and electric fault causing a
24 hour shutdown. In addition, production can be affected by externalities such as
deliveries, rig availabilities, permitting and logistics. To address the potential impact
from production deviations, we estimate the FCF sensitivities to different production
deviations and the corresponding impact on the NAV.
Production sensitivity to FCF from Tie field
Source: ABG Sundal Collier, company data
Production sensitivity to FCF from Tartaruga
Source: ABG Sundal Collier, company data
Cost of capital There appears to be only moderate sensitivity to changes in cost of capital. This can
be explained by the near-term production.
0
10
20
30
40
50
60
2019 2020e 2021e 2022e 2023e 2024e
US
Dm
-30% -25% -20% -15% -10%
-5
0
5
10
15
20
25
2019 2020e 2021e 2022e 2023e 2024eU
SD
m
-30% -25% -20% -15% -10%
NAV sensitivity to production deviations
Source: ABG Sundal Collier, company data
Sensitivity to cost of capital and oil price
Source: ABG Sundal Collier, company data
Maha Energy NAV year-end 2020 -10% -15% -20% -25% -30%
WI
Producing assets
Tie field 100% 19.7 18.3 16.9 15.5 14.1
Tartaruga 75% 7.1 6.5 5.8 5.1 4.4
LAK Ranch 99% 0.0 0.0 0.0 0.0 0.0
Core GAV 26.9 24.8 22.7 20.6 18.5
NIBD YE 2020 1.2 1.0 0.7 0.4 0.1
Core NAV 28.1 25.8 23.4 21.0 18.6
P/NAV 0.5x 0.5x 0.6x 0.6x 0.7x
Production deviation
SEK/sh
NAV sensitivity (SEK/sh)
37 45 50 55 60 65 70
9% 17.7 22.3 26.8 31.2 35.6 40.0
10% 17.2 21.6 26.0 30.4 34.7 39.0
11% 16.7 21.1 25.4 29.6 33.8 38.0
12% 16.2 20.5 24.7 28.9 33.0 37.1
13% 15.8 20.0 24.1 28.2 32.2 36.3
14% 15.4 19.5 23.5 27.6 31.5 35.5
15% 15.0 19.0 23.0 26.9 30.8 34.7
Brent
WA
CC
Maha Energy
9 March 2020 ABG Sundal Collier 19
Peer pricing and implied pricing Smaller listed E&P companies in the Nordics are currently priced around 0.3-0.6x
NAV. The P/NAV multiples from Maha’s Nordic oil and gas peers would imply the
following implied share prices. Concerns shareholders might have for Maha vs.
peers could include geological exposure and asset diversification.
P/NAV
Source: ABG Sundal Collier, company data
Implied share price using peers’ P/NAV multiple
Source: ABG Sundal Collier, company data
The Tartaruga Block concession is set to expire in 2025. Assuming that the license
is not renewed, would imply the following share prices for Maha Energy. However,
our base case is based on management guiding of high probability of extending the
license.
P/NAV
Source: ABG Sundal Collier, company data
Implied share price using P/NAV from peers
Source: ABG Sundal Collier, company data
1.32
0.78
0.64
0.53 0.51
0.40
0.29
0
0.2
0.4
0.6
0.8
1
1.2
1.4
LUPE Aker BP Tethys Oil Noreco OKEA MahaEnergy
BW Energy
43.3
25.6
21.0
17.4 16.7
13.0
9.5
0
5
10
15
20
25
30
35
40
45
50
LUPE Aker BP Tethys Oil Noreco OKEA Currentshare price
BW Energy
SEK
1.32
0.78
0.64
0.53 0.510.44
0.29
0
0.2
0.4
0.6
0.8
1
1.2
1.4
LUPE Aker BP Tethys Oil Noreco OKEA MahaEnergy
BW Energy
1.44
0.85
0.68
0.580.52
0.48
0.29
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
LUPE Aker BP Tethys Oil Noreco OKEA MahaEnergy
BW Energy
39.3
23.2
19.1
15.8 15.213.0
8.6
0
5
10
15
20
25
30
35
40
45
LUPE Aker BP Tethys Oil Noreco OKEA Currentshare price
BW Energy
SEK
Maha Energy
9 March 2020 ABG Sundal Collier 20
Country résumé
Brazil Oil and gas accounts for approximately 11% of Brazil’s exports. As such, the
economy is dependent on the oil price. The IMF projects GDP growth of 2.4%
throughout 2023 and 2.3% thereafter.
Exports by product, USDm
Source: ABG Sundal Collier, Ministry of Development, Industry and
Foreign Trade
Real GDP growth and oil price
Source: IMF, ABG Sundal Collier
Brazil entered into a recession in 2014, leading to growing debt in a political
landscape troubled with corruption. From March 2013 to July 2015, the interest rate
was increased from 7.25% to 14.25%, which stabilised the inflation rate. Economic
growth following the recession was moderate, but is expected to increase as the
government reduces fiscal deficit.
Net debt in % of GDP
Source: IMF, ABG Sundal Collier
Corruption Perception Index
Source: ABG Sundal Collier, Transparency International2
2 The CPI is defined as the perceived level of public sector corruption. The CPI scales from 0 (weak) to
100 (strong).
Crude oil12%
Fuel oils1%
Other products87%
1.4%
3.1%
1.1%
5.8%
3.2%4.0%
6.1%
5.1%
-0.1%
7.5%
4.0%
1.9%
3.0%
0.5%
-3.6%-3.3%
1.1%0.9%
2.0%2.4%2.4% 2.3%
20
30
40
50
60
70
80
90
100
110
120
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
US
D/b
bl
Real GDP growth Brent
51%
60%
54%
50%48%47%
45%
38%41%
38%34%
32%31%
33%36%
46%
52%54%
58%
0%
10%
20%
30%
40%
50%
60%
70%
43
42
43
38
40
37
35 35
30
32
34
36
38
40
42
44
Maha Energy
9 March 2020 ABG Sundal Collier 21
Inflation P
Source: IMF, ABG Sundal Collier
Currency
Source: IMF, ABG Sundal Collier
IEA forecasts Brazil to be the second-largest source of non-Opec production growth
by 2024, adding around 1mb/d to world oil production3. In January, the country
produced 3.20mb/d of the total oil production of 100.51mb/d.
Approx. 90% of production is liquids
Source: ABG Sundal Collier, Rystad Energy
Cumulative increase in liquids production
Source: ABG Sundal Collier, IEA
Most of the country’s resources are found in deepwater offshore fields. These are
largely dominated by Petrobras, but large oil companies are positioning for growth in
Brazil.
3 Source: IEA Oil 2019
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Mar-
00
Nov-
00
Jul-01
Mar-
02
Nov-
02
Jul-03
Mar-
04
Nov-
04
Jul-05
Mar-
06
Nov-
06
Jul-07
Mar-
08
Nov-
08
Jul-09
Mar-
10
Nov-
10
Jul-11
Mar-
12
Nov-
12
Jul-13
Mar-
14
Nov-
14
Jul-15
Mar-
16
Nov-
16
Jul-17
Mar-
18
Nov-
18
Jul-19
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Mar-
00
Nov-
00
Jul-01
Mar-
02
Nov-
02
Jul-03
Mar-
04
Nov-
04
Jul-05
Mar-
06
Nov-
06
Jul-07
Mar-
08
Nov-
08
Jul-09
Mar-
10
Nov-
10
Jul-11
Mar-
12
Nov-
12
Jul-13
Mar-
14
Nov-
14
Jul-15
Mar-
16
Nov-
16
Jul-17
Mar-
18
Nov-
18
Jul-19
US
D/B
RL
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
mboe/d
Liquids Gas
0
2.5
5
7.5
10
12.5
15
17.5
20
mb/d
OPEC Non-OPEC excl. US, Brazil US Brazil
Maha Energy
9 March 2020 ABG Sundal Collier 22
Producers by 2P reserves P
P
Source: ABG Sundal Collier, Rystad Energy
Awarded acreages in 2018-2019
Source: ABG Sundal Collier, Rystad Energy
15,086
2,645
713 666 627 477 377 251 204 167 157 135 133 91 88 57 51 21 17 160
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
mm
bbl
13,780
5,234 4,911
3,660 3,439 3,3322,748 2,538 2,517
1,909 1,694 1,672
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
sqkm
Production by field type (2019)
Source: ABG Sundal Collier, Rystad Energy
2,520
994
396
1190
500
1,000
1,500
2,000
2,500
3,000
Offshore deepwater Other Onshore Offshore midwater Offshore shelf
mboe/d
Maha Energy
9 March 2020 ABG Sundal Collier 23
Oil market outlook
2020 – Another year with strong non-Opec production The chart below shows that we expect non-Opec production to grow by 1.7mb/d,
driven by 1) 1.1mb/d from the US (mostly shale), 2) 0.3mb/d from Europe (the
Johan Sverdrup field in Norway) and 3) Brazil (several new fields coming on
stream).
Non-Opec production should grow by as much as 6.8mb/d in 2018-2020e. The good
news is that we expect slower growth beyond 2020. Shale players have cut capex
by about 10% in 2019 and we think there is unlikely to be significant growth in 2020.
Also, growth outside of the US is likely to be limited from 2021 due to low capex
spending over the last years.
The coronavirus has had a significant effect on the oil price. Our thesis is that WTI
50/bbl is too little for the shale players to grow enough to balance the oil market,
while at WTI 60+/bbl they are likely to grow too much. With the Brent-WTI spread at
USD 5-10/bbl, we forecast a USD 65/bbl Brent oil price; however, with more clarity
on the demand implications, we see downside risk to our oil price assumption.
Non-Opec production growth likely to slow from 2021
Source: ABG Sundal Collier, company data
Main assumptions (key figures highlighted in yellow)
Source: ABG Sundal Collier, company data
3.2
1.91.7
0.50.7
0.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
201
8
201
9
202
0e
202
1e
202
2e
202
3e
y-o
-y g
row
th (
mill. b
/d)
Non-OPEC production growth+ 6.8 in 2018-2020e
Slower growth from 2021
3.2
1.91.7
0.50.7
0.7
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
201
8
201
9
202
0e
202
1e
202
2e
202
3e
y-o
-y g
row
th (
mill. b
/d)
Non-OPEC production growth+ 6.8 in 2018-2020e
Slower growth from 2021
Key assumptions 2015 2016 2017 2018 2019 2020e 2021e
Future price (Brent, USD) 62 59
Factset (Brent, USD) 64 66
ABGSC (Brent, USD) 53 44 54 71 64 62 65
Q1 55 34 54 67 63 58 65
Q2 62 46 50 75 69 60 65
Q3 51 46 52 75 62 65 65
Q4 44 49 62 68 63 65 65
Other key assumptions:
WTI (USD) 49 43 51 60 57 57 60
Brent-WTI spread 4.0 0.2 3.3 10.6 7.3 5.0 5.0
Offshore E&P spending growth -20% -25% -12% 0% 3% 5% 7%
NOK/USD 8.06 8.40 8.27 8.13 8.80 9.00 9.00
We expect slower non-Opec production growth from 2021
Maha Energy
9 March 2020 ABG Sundal Collier 24
A closer look at consensus for 2020e It is difficult to obtain consensus estimates for supply and demand forecasts in the
oil market, so we track the monthly IEA forecasts (OECD’s Energy agency), Opec
(the oil organisation publishes forecasts in its monthly report), EIA (the US Energy
Information Administration) and FGE (Facts Global Energy – an independent
consulting firm). The table below shows these agencies’ current estimates; we call
the average of these agencies’ “estimates consensus”.
Oil market estimates
Source: ABG Sundal Collier, company data
Oil market forecasts 2020ey-o-y change in demand (mb/d), 2020e
Average/IEA OPEC EIA FGE consensus ABGSC
Demand:North America 0.12 0.18 0.09 0.11 0.13 0.01Western Europe 0.07 -0.05 -0.06 0.02 -0.01 -0.09OECD Pacific 0.01 -0.13 -0.06 -0.18 -0.09 -0.02Total OECD 0.20 0.00 -0.03 -0.05 0.03 -0.10
China 0.15 0.23 0.38 0.25 0.25 -0.02FSU 0.09 0.11 0.09 0.07 0.09 0.02Middle East -0.02 0.10 0.09 0.13 0.08 -0.12India 0.13 0.14 0.18 0.16 0.15 0.09"Other non-OECD" 0.27 0.41 0.31 0.08 0.27 0.12Total non-OECD 0.62 0.99 1.05 0.69 0.84 0.09
Global demand 0.82 0.99 1.03 0.64 0.87 -0.01
y-o-y change in production (mb/d), 2020eAverage/
IEA OPEC EIA FGE consensus ABGSCSupply:US 1.06 1.26 1.60 1.39 1.33 1.09Canada&Mexico 0.17 0.06 0.12 0.09 0.11 0.08Western Europe 0.39 0.31 0.36 0.33 0.35 0.26OECD Pacific 0.07 0.07 -0.04 n.m. 0.03 0.08China -0.01 0.02 0.07 0.08 0.04 0.00FSU 0.03 0.06 -0.01 -0.07 0.00 -0.04Other non-OPEC 0.34 0.47 0.43 0.61 0.46 0.31Total non-OPEC 2.05 2.25 2.53 2.43 2.32 1.78
Call on OPEC -1.23 -1.26 -1.50 -1.79 -1.45 -1.79
Maha Energy
9 March 2020 ABG Sundal Collier 25
Key oil market estimates
Oil market estimates – annual figures (million barrels/day)
Source: ABG Sundal Collier, IEA
Oil demand (mb/d) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
OECD
US 21.0 19.8 19.1 19.5 19.3 18.8 19.3 19.4 19.8 20.0 20.2 20.5 20.5 20.5
Other America (Canada, Mexico, Chile) 4.9 4.8 4.7 4.8 4.9 4.9 4.9 4.8 4.8 4.9 4.8 5.0 5.1 5.1
Europe 15.6 15.5 14.8 14.7 14.3 13.8 13.6 13.5 13.8 14.0 14.3 14.3 14.2 14.1
Asia Oceania 8.5 8.2 7.8 7.9 8.1 8.5 8.3 8.1 8.1 8.1 8.1 8.1 7.9 7.9
Total OECD 50.1 48.3 46.3 46.9 46.5 46.0 46.1 45.8 46.5 47.0 47.3 47.8 47.8 47.7
y-o-y (%) -0.2 % -3.6 % -4.1 % 1.3 % -1.0 % -1.1 % 0.2 % -0.6 % 1.6 % 1.0 % 0.8 % 1.1 % -0.1 % -0.2 %
Non-OECD
FSU 4.1 4.2 4.0 4.2 4.6 4.6 4.7 5.1 5.1 5.0 4.5 4.7 4.9 4.9
Europe 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8
China 7.6 7.7 8.0 9.0 9.4 9.8 10.4 10.8 11.6 12.0 12.6 13.0 13.6 13.5
India 3.1 3.2 3.2 3.3 3.5 3.6 3.7 3.8 4.2 4.4 4.6 4.9 5.0 5.1
Other Asia 6.7 6.6 6.9 7.3 7.5 7.8 8.1 8.1 7.5 8.0 9.1 9.2 9.3 9.3
Latin-America 5.4 5.7 5.7 6.1 6.3 6.5 6.6 6.8 6.7 6.5 6.4 6.4 6.4 6.4
Middle East 6.4 6.8 7.2 7.3 7.4 7.8 8.1 8.4 8.5 8.4 8.5 8.4 8.3 8.2
Africa 3.1 3.3 3.4 3.6 3.5 3.7 4.0 4.1 4.2 4.2 4.3 4.2 4.3 4.4
Total Non-OECD 37.0 38.1 39.1 41.5 42.9 44.6 46.3 47.9 48.5 49.2 50.8 51.5 52.5 52.6
y-o-y (%) 4.1 % 3.0 % 2.6 % 6.1 % 3.3 % 3.9 % 3.8 % 3.4 % 1.3 % 1.5 % 3.2 % 1.4 % 2.0 % 0.2 %
TOTAL DEMAND 87.1 86.5 85.5 88.4 89.3 90.5 92.3 93.7 95.0 96.2 98.1 99.3 100.3 100.3
y-o-y (%) 1.5 % -0.8 % -1.1 % 3.5 % 1.0 % 1.3 % 2.0 % 1.4 % 1.5 % 1.2 % 2.0 % 1.2 % 1.0 % 0.0 %
Oil supply (mb/d) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
NON-OPEC
US 7.0 6.9 7.4 7.8 8.1 9.1 10.3 12.0 13.0 12.5 13.2 15.5 17.2 18.3
Mexico 3.5 3.2 3.0 3.0 3.0 2.9 2.9 2.8 2.6 2.5 2.2 2.1 1.9 1.9
Canada 3.3 3.2 3.2 3.3 3.5 3.7 4.0 4.3 4.4 4.5 4.8 5.4 5.5 5.6
North America 13.8 13.3 13.6 14.0 14.6 15.8 17.2 19.1 20.0 19.5 20.3 23.0 24.6 25.8
Europe 5.0 4.8 4.5 4.2 3.8 3.5 3.3 3.3 3.5 3.5 3.5 3.5 3.4 3.6
Pacific 0.6 0.6 0.6 0.7 0.6 0.6 0.5 0.5 0.5 0.4 0.4 0.4 0.5 0.6
Total OECD 19.4 18.7 18.8 18.8 18.9 19.8 21.0 22.9 23.9 23.4 24.2 26.9 28.5 30.0
FSU 12.8 12.9 13.2 13.5 13.6 13.6 13.8 13.9 14.0 14.2 14.3 14.6 14.6 14.5
China 3.7 3.7 3.8 4.0 4.0 4.1 4.2 4.2 4.3 4.0 3.9 3.9 3.9 3.9
Brazil 1.8 1.9 2.0 2.1 2.2 2.2 2.1 2.4 2.5 2.6 2.7 2.7 2.9 3.1
Other non-OECD 11.3 11.8 12.0 12.7 12.8 12.5 12.7 12.8 12.8 12.6 12.4 12.7 12.7 12.7
Processing Gains 2.0 2.0 2.0 2.1 2.1 2.1 2.2 2.2 2.2 2.3 2.3 2.3 2.4 2.4
Total Non-OPEC 51.0 51.1 51.8 53.3 53.5 54.3 56.0 58.3 59.8 59.1 59.8 63.0 64.9 66.6
y-o-y (%) 0.8 % 0.1 % 1.5 % 2.8 % 0.5 % 1.4 % 3.1 % 4.2 % 2.4 % -1.1 % 1.2 % 5.3 % 3.0 % 2.7 %
OPEC
Saudi Arabia 8.5 8.9 7.9 7.9 9.1 9.5 9.4 9.5 10.1 10.4 10.0 10.3 9.9 9.7
UAE 2.5 2.6 2.3 2.3 2.5 2.7 2.8 2.8 3.0 3.1 2.9 3.0 3.1 3.0
Venezuela 2.7 2.8 2.7 2.5 2.5 2.5 2.5 2.5 2.5 2.2 2.0 1.4 0.8 0.7
Kuwait 2.2 2.3 2.0 2.0 2.2 2.5 2.6 2.6 2.8 2.9 2.7 2.8 2.7 2.7
Angola 1.6 1.8 1.8 1.8 1.7 1.8 1.7 1.7 1.8 1.7 1.6 1.5 1.4 1.4
Nigeria 2.1 2.0 1.8 2.1 2.0 2.0 1.8 1.9 1.8 1.5 1.5 1.6 1.8 1.8
Libya 1.7 1.7 1.6 1.6 0.5 1.4 0.9 0.5 0.4 0.4 0.8 1.0 1.1 0.6
Algeria 1.4 1.3 1.2 1.2 1.2 1.2 1.2 1.1 1.1 1.1 1.1 1.0 1.0 1.0
Ecuador 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.5 0.6 0.5 0.5 0.5 0.5
OPEC 9 23.2 23.9 21.7 21.8 22.1 24.0 23.3 23.0 23.9 23.8 23.2 23.1 22.2 21.4
Iraq 2.1 2.4 2.4 2.4 2.7 3.0 3.1 3.3 4.0 4.4 4.5 4.6 4.7 4.5
Iran 4.0 3.9 3.7 3.7 3.6 3.0 2.7 2.8 2.9 3.6 3.8 3.6 2.4 1.9
OPEC 11 29.3 30.2 27.9 27.9 28.4 29.9 29.1 29.2 30.7 31.8 31.4 31.3 29.3 27.8
Gabon 0.2 0.2 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Other OPEC 1.1 1.1 1.0 1.1 1.1 1.1 1.0 0.8 0.5 0.3 0.4 0.4 0.4 0.4
Total OPEC crude 30.6 31.5 29.1 29.2 29.8 31.3 30.3 30.2 31.4 32.4 32.0 31.9 30.0 28.4
NGLs 4.0 4.0 4.4 4.6 4.8 5.1 5.0 5.1 5.3 5.5 5.6 5.5 5.5 5.6
Total OPEC 34.6 35.5 33.6 33.8 34.6 36.3 35.3 35.3 36.7 37.9 37.6 37.4 35.5 34.0
TOTAL SUPPLY 85.6 86.6 85.4 87.1 88.1 90.6 91.3 93.7 96.5 96.9 97.4 100.4 100.4 100.6
Key figures 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Call on OPEC crude 32.2 31.4 29.2 30.5 31.0 31.2 31.4 30.2 30.0 31.6 32.7 30.8 29.9 28.1
OPEC crude production 30.6 31.5 29.1 29.2 29.8 31.3 30.3 30.2 31.4 32.4 32.0 31.9 30.0 28.4
= Implied stock change -1.6 0.1 -0.1 -1.3 -1.2 0.0 -1.1 0.0 1.5 0.7 -0.7 1.1 0.1 0.3
Change in OECD Industry Stocks (mb/d) -0.3 0.3 0.0 0.0 -0.2 0.2 -0.2 0.3 0.8 0.0 -0.4 0.0 0.2 0.2
Implicit change in other stocks (mb/d) -1.3 -0.2 -0.1 -1.3 -1.0 -0.1 -1.0 -0.3 0.7 0.7 -0.2 1.1 -0.1 0.2
OECD Industry Stocks (mill. barrels) 2,566 2,679 2,662 2,677 2,608 2,664 2,589 2,706 2,989 3,007 2,860 2,870 2,940 2,999
OECD Inventory Days (industry) 53.1 57.8 56.7 57.6 56.7 57.9 56.5 58.2 63.6 63.5 59.8 60.0 61.6 62.6
Maha Energy
9 March 2020 ABG Sundal Collier 26
Oil market estimates – annual figures (y-o-y growth, million barrels/d)
Source: ABG Sundal Collier, IEA
y-o-y growth
Growth y-o-y (mb/d) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
OECD
US 21.0 -1.2 -0.7 0.4 -0.2 -0.5 0.5 0.1 0.4 0.2 0.2 0.3 0.0 0.0
Other America (Canada, Mexico, Chile) 4.9 -0.1 -0.2 0.1 0.1 0.0 0.0 -0.1 0.0 0.1 -0.1 0.3 0.1 0.0
Europe -0.3 -0.2 -0.7 0.0 -0.5 -0.5 -0.2 -0.1 0.3 0.2 0.3 -0.1 0.0 -0.1
Asia Oceania -0.1 -0.3 -0.4 0.1 0.2 0.4 -0.2 -0.2 0.0 0.0 0.0 0.0 -0.1 0.0
Total OECD -0.1 -1.8 -2.0 0.6 -0.5 -0.5 0.1 -0.3 0.7 0.4 0.4 0.5 0.0 -0.1
y-o-y (%) -0.2 % -3.6 % -4.1 % 1.3 % -1.0 % -1.1 % 0.2 % -0.6 % 1.6 % 1.0 % 0.8 % 1.1 % -0.1 % -0.2 %
Non-OECD
FSU 0.1 0.1 -0.2 0.2 0.4 0.0 0.1 0.4 0.0 -0.1 -0.5 0.2 0.1 0.0
Europe 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
China 0.4 0.1 0.3 1.0 0.4 0.4 0.6 0.4 0.8 0.4 0.6 0.4 0.6 0.0
India 0.2 0.1 0.0 0.1 0.2 0.2 0.0 0.2 0.4 0.2 0.1 0.3 0.1 0.1
Other Asia 0.2 -0.2 0.3 0.4 0.2 0.3 0.3 0.1 -0.6 0.4 1.2 0.1 0.1 0.0
Latin America 0.2 0.3 0.0 0.4 0.1 0.3 0.1 0.2 -0.1 -0.2 0.0 -0.1 0.0 0.0
Middle East 0.2 0.4 0.4 0.1 0.1 0.4 0.3 0.3 0.1 -0.1 0.1 -0.1 0.0 -0.1
Africa 0.1 0.2 0.1 0.2 0.0 0.2 0.3 0.1 0.0 0.1 0.0 -0.1 0.1 0.1
Total Non-OECD 1.5 1.1 1.0 2.4 1.4 1.7 1.7 1.6 0.6 0.7 1.6 0.7 1.0 0.1
y-o-y (%) 4.1 % 3.0 % 2.6 % 6.1 % 3.3 % 3.9 % 3.8 % 3.4 % 1.3 % 1.5 % 3.2 % 1.4 % 2.0 % 0.2 %
TOTAL DEMAND 1.3 -0.7 -1.0 3.0 0.9 1.2 1.8 1.3 1.4 1.2 1.9 1.2 1.0 0.0
y-o-y (%) 1.5 % -0.8 % -1.1 % 3.5 % 1.0 % 1.3 % 2.0 % 1.4 % 1.5 % 1.2 % 2.0 % 1.2 % 1.0 % 0.0 %
y-o-y growth
Oil supply (mb/d) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
NON-OPEC
US 0.0 -0.1 0.5 0.3 0.3 1.0 1.2 1.7 1.0 -0.5 0.7 2.3 1.6 1.1
Mexico -0.2 -0.3 -0.2 0.0 0.0 0.0 0.0 -0.1 -0.2 -0.1 -0.2 -0.2 -0.1 0.0
Canada 0.1 -0.1 0.0 0.1 0.2 0.2 0.3 0.3 0.1 0.1 0.4 0.6 0.1 0.1
North America -0.1 -0.5 0.3 0.4 0.5 1.2 1.4 1.9 0.9 -0.5 0.8 2.7 1.6 1.2
Europe -0.3 -0.2 -0.2 -0.4 -0.4 -0.3 -0.1 0.0 0.2 0.0 0.0 0.0 -0.1 0.3
Pacific 0.0 0.0 0.0 0.0 -0.1 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 0.1 0.1
Total OECD -0.3 -0.7 0.1 0.1 0.0 0.9 1.2 1.9 1.0 -0.5 0.8 2.7 1.6 1.5
FSU 0.5 0.0 0.4 0.3 0.0 0.0 0.2 0.1 0.1 0.2 0.1 0.2 0.0 -0.1
China 0.1 0.1 0.0 0.3 0.0 0.1 0.0 0.0 0.1 -0.3 -0.1 0.0 0.1 0.0
Brazil 0.0 0.1 0.1 0.1 0.1 0.0 0.0 0.2 0.2 0.1 0.1 0.0 0.2 0.3
Other non-OECD 0.2 0.6 0.2 0.7 0.1 -0.3 0.2 0.1 -0.1 -0.2 -0.2 0.3 0.0 0.0
Processing Gains 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Non-OPEC 0.4 0.0 0.8 1.5 0.2 0.7 1.7 2.4 1.4 -0.7 0.7 3.2 1.9 1.7
y-o-y (%) 0.8 % 0.1 % 1.5 % 2.8 % 0.5 % 1.4 % 3.1 % 4.2 % 2.4 % -1.1 % 1.2 % 5.3 % 3.0 % 2.7 %
OPEC
Saudi Arabia -0.4 0.4 -1.0 0.0 1.2 0.4 -0.1 0.1 0.6 0.3 -0.5 0.4 -0.5 -0.1
UAE -0.1 0.1 -0.3 0.0 0.2 0.2 0.1 0.0 0.2 0.1 -0.1 0.1 0.1 -0.1
Venezuela 0.0 0.0 -0.1 -0.1 0.0 0.0 0.0 0.0 0.0 -0.2 -0.3 -0.6 -0.6 -0.2
Kuwait 0.0 0.2 -0.3 0.0 0.2 0.2 0.1 0.1 0.2 0.1 -0.2 0.0 -0.1 0.0
Angola 0.3 0.2 -0.1 0.0 -0.1 0.1 -0.1 -0.1 0.1 -0.1 -0.1 -0.2 -0.1 0.0
Nigeria -0.1 -0.2 -0.1 0.3 0.0 0.0 -0.2 0.0 -0.1 -0.3 0.1 0.1 0.2 0.0
Libya 0.0 0.0 -0.2 0.0 -1.1 0.9 -0.5 -0.4 -0.1 0.0 0.4 0.1 0.1 -0.5
Algeria 0.0 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 0.0 0.0 0.0
Ecuador 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
OPEC 9 -0.4 0.7 -2.2 0.1 0.3 1.8 -0.6 -0.3 0.9 0.0 -0.7 -0.1 -0.9 -0.8
Iraq 0.2 0.3 0.1 -0.1 0.3 0.3 0.1 0.3 0.7 0.4 0.0 0.1 0.2 -0.3
Iran 0.1 -0.1 -0.2 0.0 -0.1 -0.6 -0.3 0.1 0.0 0.7 0.3 -0.2 -1.2 -0.4
OPEC 11 -0.2 0.9 -2.3 0.0 0.5 1.5 -0.8 0.0 1.6 1.1 -0.4 -0.2 -1.9 -1.5
Gabon 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other OPEC -0.1 0.0 -0.1 0.1 0.0 0.0 -0.1 -0.1 -0.4 -0.1 0.0 0.1 0.0 0.0
Total OPEC crude 0.0 1.1 -2.5 0.0 0.8 1.1 -1.1 0.3 1.9 2.1 0.0 -0.2 -3.0 -2.3
NGLs 0.0 0.0 0.5 0.2 0.2 0.3 -0.1 0.1 0.2 0.2 0.1 -0.1 0.0 0.0
Total OPEC -0.2 0.9 -1.9 0.3 0.7 1.7 -1.0 0.1 1.4 1.1 -0.3 -0.2 -1.9 -1.5
TOTAL SUPPLY 0.2 1.0 -1.2 1.7 1.0 2.5 0.7 2.4 2.8 0.5 0.5 3.0 0.0 0.2
Key figures 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Call on OPEC crude 0.9 -0.7 -2.2 1.3 0.5 0.2 0.2 -1.2 -0.2 1.6 1.1 -1.9 -1.0 -1.8
OPEC crude production -0.3 0.9 -2.4 0.1 0.6 1.5 -0.9 -0.1 1.2 0.9 -0.4 -0.1 -1.9 -1.6
Maha Energy
9 March 2020 ABG Sundal Collier 27
Oil market estimates – quarterly figures (million barrels/day)
al
Source: ABG Sundal Collier, IEA
Oil demand (mill. b/d) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19e Q4'19e Q1'20e Q2'20e Q3'20e Q4'20e
OECD
US 19.5 20.1 20.0 20.2 20.4 20.4 20.7 20.6 20.3 20.4 20.7 20.8 20.2 20.1 20.9 21.0
Other America (Canada, Mexico, Chile)5.1 5.1 5.1 5.1 5.0 5.0 5.2 5.0 5.1 5.0 5.2 5.1 5.1 5.0 5.2 5.2
Europe 13.8 14.3 14.7 14.4 14.1 14.2 14.7 14.1 13.9 14.0 14.7 14.3 13.8 13.6 14.7 14.4
Pacific 8.5 7.7 7.8 8.3 8.7 7.7 7.8 8.1 8.3 7.5 7.6 8.2 8.3 7.3 7.7 8.3
Total OECD 46.9 47.0 47.7 48.1 48.0 47.3 48.3 47.8 47.6 46.9 48.2 48.5 47.4 46.0 48.5 48.9
y-o-y (%) 0.3 % 2.0 % 0.7 % 1.4 % 2.4 % 0.5 % 1.3 % -0.6 % -0.8 % -0.8 % -0.1 % 1.4 % -0.5 % -1.8 % 0.6 % 0.8 %
Non-OECD
FSU 4.3 4.5 4.7 4.6 4.5 4.6 4.9 4.8 4.6 4.8 5.1 5.0 4.7 4.8 5.1 4.9
Europe 0.7 0.8 0.8 0.8 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8
China 12.4 12.9 12.3 12.7 12.7 13.0 13.1 13.1 13.0 13.7 13.8 13.7 12.6 13.3 14.2 14.1
India 4.5 4.7 4.4 4.7 4.9 5.0 4.6 4.9 5.1 5.1 4.8 5.1 5.3 5.1 4.9 5.2
Other Asia 8.8 8.9 8.9 9.0 9.2 9.3 9.1 9.3 9.4 9.2 9.1 9.5 9.2 9.1 9.3 9.7
Latin America 6.3 6.5 6.6 6.5 6.3 6.3 6.5 6.4 6.2 6.4 6.4 6.4 6.2 6.4 6.5 6.4
Middle East 8.2 8.7 8.9 8.2 8.1 8.4 8.7 8.2 8.1 8.2 8.7 8.2 7.9 8.0 8.7 8.2
Africa 4.4 4.3 4.2 4.3 4.3 4.3 4.1 4.3 4.3 4.3 4.2 4.3 4.4 4.4 4.3 4.4
Total Non-OECD 49.7 51.1 50.8 50.6 50.7 51.6 51.8 51.7 51.6 52.5 52.9 52.9 51.0 51.7 53.7 53.8
y-o-y (%) 2.1 % 3.0 % 2.7 % 2.5 % 2.1 % 1.1 % 1.9 % 2.2 % 1.8 % 1.6 % 2.2 % 2.3 % -1.2 % -1.4 % 1.5 % 1.7 %
TOTAL DEMAND 96.6 98.1 98.4 98.7 98.8 98.9 100.0 99.5 99.3 99.3 101.1 101.4 98.4 97.8 102.2 102.7
y-o-y (%) 1.2 % 2.5 % 1.7 % 1.9 % 2.3 % 0.8 % 1.6 % 0.8 % 0.5 % 0.4 % 1.1 % 1.9 % -0.9 % -1.6 % 1.1 % 1.3 %
Oil supply (mill. b/d) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19e Q4'19e Q1'20e Q2'20e Q3'20e Q4'20e
NON-OPEC
US 12.7 13.0 13.2 14.0 14.4 15.1 16.0 16.5 16.6 17.1 17.2 17.8 18.0 18.3 18.1 18.6
Mexico 2.3 2.3 2.2 2.1 2.2 2.1 2.1 2.0 1.9 1.9 2.0 2.0 2.0 1.9 1.9 1.9
Canada 4.9 4.5 4.9 5.0 5.2 5.0 5.2 5.5 5.4 5.5 5.5 5.6 5.7 5.6 5.6 5.6
North America 20.0 19.8 20.2 21.1 21.7 22.2 23.3 23.9 24.0 24.5 24.7 25.3 25.7 25.8 25.6 26.2
Europe 3.7 3.5 3.4 3.4 3.6 3.4 3.3 3.5 3.5 3.2 3.1 3.6 3.6 3.6 3.4 3.8
Pacific 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.6 0.6 0.6 0.5 0.6
Total OECD 24.0 23.6 24.0 24.9 25.7 25.9 27.0 27.9 27.9 28.2 28.3 29.5 29.8 30.0 29.5 30.6
FSU 14.4 14.4 14.3 14.4 14.4 14.5 14.6 14.8 14.8 14.4 14.6 14.6 14.5 14.5 14.5 14.5
China 4.0 3.9 3.8 3.8 3.8 3.9 3.8 3.9 3.9 4.0 3.9 3.9 3.9 3.9 3.9 3.9
Brazil 2.8 2.7 2.7 2.7 2.7 2.7 2.6 2.7 2.7 2.7 3.0 3.1 3.1 3.1 3.1 3.2
Other 12.0 12.4 12.8 12.4 12.1 12.8 13.0 12.5 12.2 12.9 13.0 12.5 12.3 12.9 13.1 12.5
Processing Gains 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4
Total Non-OPEC 59.4 59.3 59.9 60.5 61.1 62.0 63.4 64.2 63.9 64.5 65.2 66.0 66.1 66.8 66.5 67.1
y-o-y (%) -0.4 % 1.0 % 0.8 % 0.5 % 2.7 % 4.5 % 5.9 % 6.1 % 4.6 % 4.0 % 2.9 % 2.7 % 3.4 % 3.5 % 2.0 % 1.7 %
OPEC
Saudi Arabia 9.9 10.0 10.0 10.0 10.0 10.1 10.4 10.8 10.1 9.8 9.5 10.2 9.7 9.7 9.7 9.7
UAE 3.0 2.9 2.9 2.9 2.8 2.9 3.0 3.3 3.1 3.1 3.1 3.1 3.0 3.0 3.0 3.0
Venezuela 2.1 2.1 2.0 1.8 1.5 1.4 1.3 1.3 1.1 0.9 0.8 0.7 0.7 0.7 0.7 0.7
Kuwait 2.7 2.7 2.7 2.7 2.7 2.7 2.8 2.8 2.7 2.7 2.7 2.6 2.7 2.7 2.7 2.7
Angola 1.6 1.6 1.7 1.6 1.0 1.5 1.5 1.5 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4
Nigeria 1.4 1.5 1.6 1.6 1.7 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8 1.8
Libya 0.7 0.7 0.9 1.0 1.0 0.9 1.1 1.1 1.0 1.2 1.1 1.1 0.6 0.4 0.6 0.8
Algeria 1.1 1.1 1.1 1.0 1.0 1.0 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Ecuador 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.5 0.5 0.5 0.5 0.5
OPEC 9 22.9 23.1 23.4 23.1 22.2 22.6 23.3 23.9 22.6 22.2 21.8 22.3 21.4 21.2 21.4 21.6
Iraq 4.5 4.5 4.5 4.5 4.5 4.5 4.7 4.7 4.7 4.7 4.8 4.7 4.5 4.5 4.5 4.5
Iran 3.8 3.8 3.8 3.8 3.8 3.8 3.6 3.0 2.7 2.4 2.2 2.2 2.0 1.9 1.9 1.9
OPEC 11 31.1 31.4 31.8 31.3 30.5 30.9 31.6 31.6 30.0 29.4 28.8 29.1 27.8 27.6 27.8 28.0
Gabon 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Other OPEC 0.4 0.4 0.4 0.4 1.0 0.4 0.3 0.4 0.4 0.5 0.4 0.4 0.4 0.4 0.4 0.4
Total OPEC crude 31.7 32.0 32.3 32.0 31.7 31.5 32.0 32.2 30.7 30.1 29.4 29.8 28.5 28.2 28.4 28.6
NGLs 5.6 5.6 5.6 5.6 5.5 5.5 5.6 5.6 5.6 5.5 5.4 5.6 5.6 5.6 5.6 5.6
Total OPEC 37.3 37.6 38.0 37.5 37.3 37.0 37.6 37.8 36.2 35.6 34.9 35.4 34.0 33.8 34.0 34.2
TOTAL SUPPLY 96.7 96.9 97.8 98.1 98.3 99.1 101.0 102.0 100.1 100.1 100.1 101.3 100.1 100.5 100.5 101.3
Key figures Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19e Q4'19e Q1'20e Q2'20e Q3'20e Q4'20e
Call on OPEC crude 31.5 33.1 32.9 32.6 32.2 31.3 31.1 29.7 29.8 29.3 30.5 29.9 26.8 25.4 30.1 30.1
OPEC crude production 31.7 32.0 32.3 32.0 31.7 31.5 32.0 32.2 30.7 30.1 29.4 29.8 28.5 28.2 28.4 28.6
= Implied stock change 0.2 -1.2 -0.6 -0.6 -0.4 0.2 1.0 2.5 0.8 0.7 -1.0 -0.1 1.7 2.8 -1.7 -1.5
Change in OECD Industry Stocks (mb/d)0.3 -0.1 -0.5 -1.2 -0.5 0.0 0.6 0.1 0.4 0.4 -0.5 0.0 0.8 1.4 -0.9 -0.7
Implicit change in other stocks (mb/d)-0.1 -0.9 0.1 0.7 0.0 0.2 0.4 2.6 0.7 0.2 -1.1 -0.1 0.8 1.4 -0.9 -0.7
OECD Industry Stocks (mill. barrels)3,035 3,024 2,974 2,860 2,814 2,810 2,863 2,870 2,877 2,935 2,944 2,940 3,016 3,143 3,064 2,997
OECD Inventory Days (industry) 63.6 63.3 62.1 59.8 58.9 59.0 60.1 60.0 60.3 61.8 61.8 61.5 63.1 65.7 64.1 62.7
Maha Energy
9 March 2020 ABG Sundal Collier 28
Oil market estimates – quarterly figures (y-o-y growth, million barrels/d)
Source: ABG Sundal Collier, company data
Growth y-o-y (mill. barrels/day) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19e Q4'19e Q1'20e Q2'20e Q3'20e Q4'20e
OECD
US 0.0 0.6 0.1 0.4 0.8 0.3 0.7 0.4 0.0 0.0 0.0 0.2 -0.1 -0.3 0.2 0.2
Other America (Canada, Mexico, Chile)0.0 0.1 0.0 0.0 -0.1 -0.1 0.0 -0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.1
Europe 0.2 0.3 0.3 0.2 0.2 -0.1 0.0 -0.3 -0.2 -0.2 0.0 0.2 -0.1 -0.4 0.0 0.1
Pacific -0.1 0.0 0.0 -0.1 0.2 0.1 0.0 -0.2 -0.3 -0.2 -0.1 0.1 0.0 -0.2 0.1 0.1
Total OECD 0.1 0.9 0.3 0.6 1.1 0.2 0.6 -0.3 -0.4 -0.4 0.0 0.7 -0.3 -0.8 0.3 0.4
y-o-y (%) 0.3 % 2.0 % 0.7 % 1.4 % 2.4 % 0.5 % 1.3 % -0.6 % -0.8 % -0.8 % -0.1 % 1.4 % -0.5 % -1.8 % 0.6 % 0.8 %
Non-OECD
FSU -0.2 0.0 -0.1 -0.2 0.2 0.1 0.2 0.2 0.1 0.1 0.2 0.1 0.1 0.0 0.0 0.0
Europe 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0
China 0.7 0.9 0.8 0.8 0.3 0.1 0.8 0.4 0.3 0.8 0.6 0.6 -0.4 -0.5 0.4 0.4
India -0.2 0.0 0.0 0.2 0.5 0.4 0.2 0.2 0.2 0.0 0.1 0.2 0.1 0.0 0.1 0.1
Other Asia 0.4 0.5 0.6 0.5 0.4 0.4 0.2 0.3 0.2 -0.1 0.1 0.2 -0.2 -0.2 0.2 0.3
Latin America -0.1 -0.1 -0.1 -0.1 0.0 -0.1 -0.1 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Middle East 0.4 0.3 0.2 0.1 -0.2 -0.2 -0.2 -0.1 0.0 -0.2 0.0 0.0 -0.2 -0.2 0.0 0.0
Africa 0.0 0.0 0.0 -0.1 -0.1 0.0 -0.1 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Total Non-OECD 1.0 1.5 1.3 1.2 1.1 0.6 1.0 1.1 0.9 0.8 1.1 1.2 -0.6 -0.7 0.8 0.9
y-o-y (%) 2.1 % 3.0 % 2.7 % 2.5 % 2.1 % 1.1 % 1.9 % 2.2 % 1.8 % 1.6 % 2.2 % 2.3 % -1.2 % -1.4 % 1.5 % 1.7 %
TOTAL DEMAND 1.2 2.4 1.7 1.9 2.2 0.8 1.6 0.8 0.5 0.4 1.1 1.9 -0.9 -1.6 1.1 1.3
y-o-y (%) 1.2 % 2.5 % 1.7 % 1.9 % 2.3 % 0.8 % 1.6 % 0.8 % 0.5 % 0.4 % 1.1 % 1.9 % -0.9 % -1.6 % 1.1 % 1.3 %
Oil supply (mill. b/d) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19e Q4'19e Q1'20e Q2'20e Q3'20e Q4'20e
NON-OPEC
US 0.0 0.4 0.9 1.5 1.7 2.1 2.8 2.6 2.3 2.0 1.2 1.3 1.4 1.2 0.9 0.8
Mexico -0.2 -0.2 -0.3 -0.2 -0.2 -0.2 -0.1 -0.2 -0.2 -0.2 -0.1 0.0 0.0 0.0 -0.1 -0.1
Canada 0.3 0.6 0.3 0.2 0.3 0.5 0.4 0.4 0.3 0.5 0.3 0.1 0.3 0.0 0.1 0.1
North America 0.1 0.8 0.9 1.5 1.8 2.4 3.1 2.8 2.3 2.4 1.4 1.4 1.7 1.3 0.9 0.8
Europe 0.0 0.1 0.0 -0.2 -0.1 -0.1 -0.1 0.1 -0.1 -0.2 -0.2 0.1 0.1 0.4 0.3 0.2
Pacific 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.1 0.1 0.1 0.0 0.1
Total OECD 0.1 0.8 0.8 1.2 1.7 2.3 3.1 3.0 2.2 2.3 1.3 1.6 1.9 1.8 1.2 1.1
FSU 0.2 0.4 0.3 -0.1 0.0 0.1 0.3 0.5 0.4 -0.1 0.0 -0.2 -0.3 0.1 -0.1 -0.1
China -0.2 -0.1 -0.1 -0.1 -0.1 -0.1 0.0 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0
Brazil 0.4 0.2 0.0 0.0 0.0 0.0 -0.1 0.0 0.0 0.0 0.4 0.3 0.4 0.4 0.1 0.1
Other -0.7 -0.6 -0.5 -0.6 0.1 0.4 0.2 0.1 0.1 0.1 0.0 0.0 0.1 0.0 0.0 0.0
Processing Gains 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Non-OPEC -0.2 0.6 0.5 0.3 1.6 2.7 3.5 3.7 2.8 2.5 1.8 1.7 2.2 2.3 1.3 1.1
y-o-y (%) -0.4 % 1.0 % 0.8 % 0.5 % 2.7 % 4.5 % 5.9 % 6.1 % 4.6 % 4.0 % 2.9 % 2.7 % 3.4 % 3.5 % 2.0 % 1.7 %
OPEC
Saudi Arabia -0.3 -0.4 -0.6 -0.6 0.1 0.2 0.4 0.8 0.1 -0.4 -0.9 -0.6 -0.3 0.0 0.3 -0.5
UAE 0.2 0.0 -0.2 -0.2 -0.1 -0.1 0.1 0.4 0.2 0.2 0.1 -0.2 0.0 -0.1 -0.1 -0.1
Venezuela -0.3 -0.2 -0.2 -0.4 -0.5 -0.7 -0.7 -0.5 -0.4 -0.5 -0.6 -0.7 -0.5 -0.2 -0.1 0.0
Kuwait -0.1 -0.1 -0.2 -0.2 0.0 0.0 0.1 0.1 0.0 0.0 -0.1 -0.2 0.0 0.0 0.0 0.1
Angola -0.1 -0.1 -0.1 0.0 -0.6 -0.2 -0.2 -0.2 0.4 -0.1 -0.1 -0.1 0.0 0.0 0.0 0.0
Nigeria -0.4 0.0 0.4 0.1 0.3 0.0 0.0 0.0 0.0 0.2 0.2 0.2 0.1 0.0 -0.1 0.0
Libya 0.3 0.4 0.6 0.4 0.4 0.2 0.1 0.1 -0.1 0.3 0.0 0.0 -0.4 -0.8 -0.5 -0.3
Algeria -0.1 0.0 0.0 -0.1 0.0 0.0 0.0 0.1 0.0 0.0 0.0 -0.1 0.0 0.0 0.0 0.0
Ecuador 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
OPEC 9 -0.8 -0.5 -0.3 -0.9 -0.6 -0.5 -0.1 0.8 0.3 -0.3 -1.5 -1.6 -1.2 -1.0 -0.4 -0.7
Iraq 0.2 0.2 0.1 -0.2 0.0 0.0 0.2 0.2 0.3 0.3 0.1 0.0 -0.2 -0.3 -0.3 -0.2
Iran 0.6 0.2 0.2 0.0 0.1 0.1 -0.2 -0.8 -1.1 -1.4 -1.4 -0.9 -0.7 -0.5 -0.3 -0.3
OPEC 11 0.0 -0.1 -0.1 -1.1 -0.6 -0.5 -0.2 0.2 -0.5 -1.5 -2.8 -2.4 -2.2 -1.8 -1.0 -1.2
Gabon 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other OPEC 1.1 1.2 0.4 0.4 0.6 0.0 -0.1 0.0 -0.6 0.0 0.2 0.0 0.0 0.0 0.0 0.0
Total OPEC crude 1.0 1.0 0.2 -0.6 0.0 -0.5 -0.3 0.2 -1.1 -1.5 -2.6 -2.4 -2.2 -1.8 -1.0 -1.2
NGLs 0.1 0.1 0.2 0.1 -0.1 -0.1 -0.1 0.0 0.0 0.0 -0.1 0.0 0.0 0.1 0.1 0.0
Total OPEC 1.1 1.1 0.4 -0.5 0.0 -0.5 -0.4 0.2 -1.0 -1.5 -2.7 -2.4 -2.2 -1.8 -0.9 -1.2
TOTAL SUPPLY 0.9 1.7 0.8 -0.2 1.6 2.1 3.2 3.9 1.8 1.0 -0.9 -0.7 0.0 0.5 0.4 -0.1
Key figures Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19e Q4'19e Q1'20e Q2'20e Q3'20e Q4'20e
Call on OPEC crude 1.3 1.7 1.0 1.5 0.6 -1.8 -1.9 -2.9 -2.3 -2.0 -0.6 0.1 -3.1 -3.9 -0.3 0.2
OPEC crude production 1.0 1.0 0.2 -0.6 0.0 -0.5 -0.3 0.2 -1.1 -1.5 -2.6 -2.4 -2.2 -1.8 -1.0 -1.2
Maha Energy
9 March 2020 ABG Sundal Collier 29
Fiscal terms
For all practical purposes, Maha Energy is under the fiscal regimes of Brazil (the Tie
and Tartaruga fields) and the US (LAK Ranch). In both countries, the fiscal regimes
include royalties, ad valorem/sales taxation and regular corporate tax. The royalty is
paid to the landowner/government, while the ad valorem/sales tax is a top-line tax to
the state.
Fiscal regime for the Tie Field
Royalty:
The Tie field is subject to an 11.1% royalty.
Corporate tax:
The statutory tax rate in Brazil is 34%, but due to a tax rate incentive of 18.75%, the
effective tax rate is 15.25%. The tax rate incentive is scheduled until 2024, but the
company expects that the period will be extended. Following the acquisition of the
field, Maha Energy assumed tax loss carry forwards of which USD 50m remained at
year-end 2018. Tax losses that are carried forward may be used to offset up to 30%
of the taxable income in the tax period.
Fiscal regime for the Tartaruga Block
Royalty:
The Tartaruga Block is subject to a 10.7% royalty.
Overriding royalty:
An overriding royalty of 10% is also payable to Petrobras.
Corporate tax:
The statutory tax rate in Brazil is 34%, but due to a tax rate incentive of 18.75%, the
effective tax rate is 15.25%. The duration of the tax rate incentive is until year-end
2029. The tax loss carried forward balance in Brazil may be used to offset up to
30% of the taxable income in the tax period.
Fiscal regime for the Lak Ranch Royalty:
Production from the LAK Ranch was subject to 14.06% royalties until 2019, and
17.4% thereafter. In addition, the 1% partner in LAK is carried for its costs, and as
such, it can be viewed as a royalty.
Ad Valorem tax:
Production from the LAK Ranch is subject to 12.97% sales tax.
Corporate tax:
The corporate tax in the US is 21%.
Maha Energy
9 March 2020 ABG Sundal Collier 30
Management
Jonas Lindvall
CEO since 2016
Mr. Lindvall holds a B.Sc. in Petroleum Engineering and a Masters Degree in
Energy Business from the University of Tulsa, USA. He is a seasoned senior
executive with 28 years of international experience in the upstream oil and gas
industry across Europe, North America, Africa and Asia. Mr. Lindvall started his
career working in Lundin Oil for 8 years, during the early days of E&P growth. After
6 years in Shell and Talisman Energy, he joined, and helped secured the success,
of Tethys Oil. Mr. Lindvall holds a total of 4,931,147 shares in Maha Energy.
Alan Johnson
Vice President Operations since 2019
Mr. Johnson graduated with a 1st Class B. Eng (Hons) from Heriot Watt University,
Scotland. He is a senior oil and gas executive with over 25 years of experience
working internationally in Europe, Africa, North and South America and Australasia.
Mr. Johnsons experience includes varied technical, managerial and executive roles
in drilling, production, reservoir, reserves, corporate planning and asset
management. He started his career in E&P with Shell International in the Dutch
North Sea, and has since then held positions with increasing responsibility with
Shell Canada, APF Energy, Rockyview Energy, Delphi Energy, BG Australia and
Caracal Energy. Mr. Johnson’s latest role was Vice President, Asset Management
at Gran Tierra Energy managing its portfolio of assets in Colombia, Brazil and Peru.
Mr. Johnson is a Chartered Engineer in the UK and a Professional Engineer in
Alberta, Canada.
Andres Modarelli
CFO since 2017
Mr. Modarelli holds a Bachelor of Commerce and Bachelor of Business
Administration degrees from the Pontifical Catholic University of Argentina, and
Chartered Professional Accountant designations (CPA) in Canada and Argentina. In
total, Mr. Modarelli has over 17 years of experience in finance and accounting,
including international oil and gas experience in South America.
Jamie McKeown,
VP Exploration and Production since 2016
Mr. McKeown holds a B.Sc. in Geology from the Victoria University of Wellington,
New Zealand. He has over 30 years of experience with IPC (Lundin) Oil, Apache
Energy and Maha Energy. Mr. McKeown has worked extensively throughout North
and East Africa, the Middle East and the US.
Victoria Berg
Manager Investor Relations and (interim) Deputy Managing Director since 2019
Ms. Berg holds a Project Management Diploma from the Frans Schartau Business
Institute in Stockholm and studied Communications at Stockholm University. Over
the past ten years she has had various roles coordinating and managing events and
public/investor relations.
Maha Energy
9 March 2020 ABG Sundal Collier 31
Board of Directors
Anders Ehrenblad,
Member of the Board of Directors since 2013 and Chairman since 2019
Mr. Ehrenblad holds a M.Sc. in Business Administration from University of Uppsala,
Sweden. Mr. Ehrenblad works in investment, financial and management consulting
and has broad experience from private companies such as Investment Manager
and partner of Graviton AB, Board Member of RF Coverage AB, AB PiaCare and
Maven Wireless AB. Mr. Ehrenblad holds 779,607 shares in Maha Energy.
Jonas Lindvall
Member of the Board of Directors since 2013 and Managing Director since 2016
See information in the Management section.
Nicholas Walker
Member of the Board of Directors since May 2019
Mr. Walker is the COO of Lundin Petroleum AB. He holds a B.Sc. in Mining
Engineering from the Imperial College London, a M.Sc. in Computer Science from
the University College London as well as an MBA from the City University Business
School in London. He has over 30 years of international experience in the upstream
oil and gas industry in senior executive/management positions across Europe,
Africa, Asia and the Americas including Bow Valley Energy Inc., Talisman Energy
Inc., Africa Oil Corp. and Lundin Petroleum AB. Mr. Walker holds a total of 464,211
shares in Maha Energy.
Harald Pousette
Member of the Board of Directors since June 2017
Mr. Pousette holds a Bachelor of Arts (Economics) from the University of Uppsala,
Sweden. Mr. Pousette is the Chief Executive Officer of Kvalitena Industrier AB. He
previously worked in the finance and real estate industries, including recently as
Chief Financial Officer of Kvalitena AB. Mr. Pousette is the Chairman of Norrfordon
Holding AB, Bil Dahl AB, Bil- och Tratorservice i Stigtomta AB, Jitech AB, and Board
Member of Stig Svenssons Motorverkstad AB and companies in the Kvalitena
Group. Mr. Pousette holds a total of 874,142 shares in Maha Energy. Kvalitena AB
is the main shareholder of Maha Energy, controlling 21.6% of the company shares.
Maha Energy
9 March 2020 ABG Sundal Collier 32
Shareholder structure
Shareholder structure as of December 31, 2019
Shareholder Outstanding shares Ownership share
Kvalitena AB 21,421,660 21.3%
Forsakringsaktiebolaget, Avanza Pension 6,154,871 6.1%
Jonas Lindvall (Maha CEO and Managing Director) 4,761,147 4.7%
Ron Panchuk (Former Maha Vice President and CCO) 2,934,016 2.9%
UBS Switzerland AG W8IMY 2,929,224 2.9%
Alandsbanken in place of Owners 2,034,353 2.0%
SIX SIS AG 1,586,189 1.6%
Al Subhi, Talal Saif 1,360,000 1.4%
BNY Mellom NA (Former Mellon), W9 1,264,753 1.3%
Nordnet 1,197,110 1.2%
Total ten largest shareholders 45,643,323 45.5%
Remaining shareholders 54,773,545 54.5%
Total A and B shares outstanding 100,416,868 100%
Source: ABG Sundal Collier, company data
Maha Energy
9 March 2020 ABG Sundal Collier 33
Main risks
We view the main risks to the company as: Oil and gas prices Maha Energy is exposed to adverse shifts in oil and gas prices. Currency risk The functional currencies are USD, SEK and BRL, while the trading currency is SEK, i.e. Maha Energy is exposed to adverse currency fluctuations. Project execution Maha Energy and its contractors’ ability to execute projects according to the schedule and on budget, including infrastructure in place and offtake capacity. Political/regulatory risk Operating in several countries, with various political and regulatory regimes, Maha Energy is exposed to adverse changes in regulatory and political regimes.
Maha Energy
9 March 2020 ABG Sundal Collier 34
Source: ABG Sundal Collier, Company data
Income Statement (USDm) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Sales 7 7 8 11 10 12 14 12
COGS -3 -3 -3 -2 -3 -3 -3 -4
Gross profit 5 4 5 8 8 9 11 8
Other operating items 0 0 0 0 0 0 0 0
EBITDA 5 4 5 8 8 9 11 8
Depreciation and amortisation -1 -1 -1 -1 -1 -1 -2 -1
EBITA 4 3 5 7 6 8 9 6
EO items 0 0 0 0 0 0 0 0
Impairment and PPA amortisation 0 0 0 0 0 0 0 0
EBIT 4 3 5 7 6 8 9 6
Net financial items -1 -1 -1 -0 -1 -1 -1 -1
Pretax profit 2 2 3 7 5 7 8 5
Tax -0 -0 -0 11 -1 -1 -1 -2
Net profit 2 2 3 18 4 6 7 3
Minority interest 0 0 0 0 0 0 0 0
Net profit discontinued 0 0 0 0 0 0 0 0
Net profit to shareholders 2 2 3 18 4 6 7 3
EPS 0.02 0.02 0.03 0.17 0.04 0.06 0.06 0.02
EPS Adj 0.02 0.02 0.03 0.17 0.04 0.06 0.06 0.02
Total extraordinary items after tax 0 0 0 0 0 0 0 0
Tax rate (%) 7.7 10.6 8.0 160.0 16.0 9.8 15.3 47.1
Gross margin (%) 61.4 57.2 67.4 77.3 74.8 75.1 76.5 64.4
EBITDA margin (%) 61.4 57.2 67.4 77.3 74.8 75.1 76.5 64.4
EBITA margin (%) 49.8 46.8 58.1 64.3 60.8 64.4 65.5 52.6
EBIT margin (%) 49.8 46.8 58.1 64.3 60.8 64.4 65.5 52.6
Pretax margin (%) 33.6 30.0 43.7 64.1 49.4 55.8 55.6 43.2
Net margin (%) 31.0 26.9 40.2 166.5 41.5 50.3 47.1 22.8
Growth rates Y/Y Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Sales growth (%) +chg 821.4 49.7 84.0 37.7 76.7 74.3 6.9
EBITDA growth (%) +chg +chg 138.7 172.0 67.8 132.0 97.8 -11.0
EBIT growth (%) +chg +chg 448.2 122.7 68.2 143.2 96.4 -12.5
Net profit growth (%) +chg +chg +chg 636.0 84.2 231.2 104.5 -85.3
EPS growth (%) +chg +chg +chg 636.0 84.2 231.2 104.5 -85.3
Adj earnings numbers Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
EBITDA Adj 5 4 5 8 8 9 11 8
EBITDA Adj margin (%) 61.4 57.2 67.4 77.3 74.8 75.1 76.5 64.4
EBITA Adj 4 3 5 7 6 8 9 6
EBITA Adj margin (%) 49.8 46.8 58.1 64.3 60.8 64.4 65.5 52.6
EBIT Adj 4 3 5 7 6 8 9 6
EBIT Adj margin (%) 49.8 46.8 58.1 64.3 60.8 64.4 65.5 52.6
Pretax profit Adj 2 2 3 7 5 7 8 5
Net profit Adj 2 2 3 18 4 6 7 3
Net profit to shareholders Adj 2 2 3 18 4 6 7 3
Net Adj margin (%) 31.0 26.9 40.2 166.5 41.5 50.3 47.1 22.8
Maha Energy
9 March 2020 ABG Sundal Collier 35
Source: ABG Sundal Collier, Company data
Income Statement (USDm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Sales 0 0 0 0 0 0 12 33 48 67
COGS 0 0 0 0 0 0 -9 -11 -13 -15
Gross profit 0 0 0 0 0 0 3 22 35 52
Other operating items 0 0 0 0 0 0 0 0 0 0
EBITDA 0 0 0 0 0 0 3 22 35 52
Depreciation and amortisation 0 0 0 0 0 0 -2 -4 -6 -9
Of which leasing depreciation 0 0 0 0 0 0 0 0 0 0
EBITA 0 0 0 0 0 0 1 19 29 44
EO items 0 0 0 0 0 0 0 0 0 0
Impairment and PPA amortisation 0 0 0 0 0 0 0 0 0 0
EBIT 0 0 0 0 0 0 1 19 29 44
Net financial items 0 0 0 0 0 0 -4 -4 -5 -4
Pretax profit 0 0 0 0 0 0 -3 15 25 39
Tax 0 0 0 0 0 0 -0 11 -5 -6
Net profit 0 0 0 0 0 0 -3 26 20 33
Minority interest 0 0 0 0 0 0 0 0 0 0
Net profit discontinued 0 0 0 0 0 0 0 0 0 0
Net profit to shareholders 0 0 0 0 0 0 -3 26 20 33
EPS 0 0 0 0 0 0 -0.03 0.25 0.18 0.31
EPS Adj 0 0 0 0 0 0 -0.03 0.25 0.18 0.31
Total extraordinary items after tax 0 0 0 0 0 0 0 0 0 0
Leasing payments 0 0 0 0 0 0 0 0 0 0
Tax rate (%) ns ns ns ns ns ns 10.2 69.9 20.5 15.3
Gross margin (%) nm nm nm nm nm nm 27.4 67.2 72.8 77.5
EBITDA margin (%) nm nm nm nm nm nm 27.4 67.2 72.8 77.5
EBITA margin (%) nm nm nm nm nm nm 10.6 55.9 61.1 64.8
EBIT margin (%) nm nm nm nm nm nm 10.6 55.9 61.1 64.8
Pretax margin (%) nm nm nm nm nm nm -20.1 45.3 51.3 58.5
Net margin (%) nm nm nm nm nm nm -22.2 76.9 40.8 49.6
Growth rates Y/Y 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Sales growth (%) na na na na na na na 168.1 44.4 39.5
EBITDA growth (%) na na na na na na high 558.4 56.5 48.3
EBIT growth (%) na na na na na na high 1,320.9 57.7 48.0
Net profit growth (%) na na na na na na high 1,029.5 -23.4 69.5
EPS growth (%) na na na na na na high 895.1 -28.3 69.0
Profitability 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
ROE (%) nm nm nm nm nm nm -11.6 43.9 25.0 31.9
ROE Adj (%) nm nm nm nm nm nm -11.6 43.9 25.0 31.9
ROCE (%) nm nm nm nm nm nm 1.7 21.9 26.7 32.2
ROCE Adj(%) nm nm nm nm nm nm 1.7 21.9 26.7 32.2
ROIC (%) na na na na na na 4.8 45.6 26.4 35.5
ROIC Adj (%) na na na na na na 4.8 45.6 26.4 35.5
Adj earnings numbers 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
EBITDA Adj 0 0 0 0 0 0 3 22 35 52
EBITDA Adj margin (%) nm nm nm nm nm nm 27.4 67.2 72.8 77.5
EBITDA lease Adj 0 0 0 0 0 0 3 22 35 52
EBITDA lease Adj margin (%) nm nm nm nm nm nm 27.4 67.2 72.8 77.5
EBITA Adj 0 0 0 0 0 0 1 19 29 44
EBITA Adj margin (%) nm nm nm nm nm nm 10.6 55.9 61.1 64.8
EBIT Adj 0 0 0 0 0 0 1 19 29 44
EBIT Adj margin (%) nm nm nm nm nm nm 10.6 55.9 61.1 64.8
Pretax profit Adj 0 0 0 0 0 0 -3 15 25 39
Net profit Adj 0 0 0 0 0 0 -3 26 20 33
Net profit to shareholders Adj 0 0 0 0 0 0 -3 26 20 33
Net Adj margin (%) nm nm nm nm nm nm -22.2 76.9 40.8 49.6
Maha Energy
9 March 2020 ABG Sundal Collier 36
Source: ABG Sundal Collier, Company data
Cash Flow Statement (USDm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
EBITDA 0 0 0 0 0 0 3 22 35 52
Net financial items 0 0 0 0 0 0 -4 -4 -5 -4
Paid tax 0 0 0 0 0 0 -0 -0 -2 -0
Non-cash items 0 0 0 0 0 0 2 5 4 0
Cash flow before change in WC 0 0 0 0 0 0 1 23 32 48
Change in WC 0 0 0 0 0 0 4 -3 -2 0
Operating cash flow 0 0 0 0 0 0 5 20 30 48
CAPEX tangible fixed assets 0 0 0 0 0 0 -3 -16 -28 -19
CAPEX intangible fixed assets 0 0 0 0 0 0 0 0 0 0
Acquisitions and disposals 0 0 0 0 0 0 -33 0 0 0
Free cash flow 0 0 0 0 0 0 -31 5 2 28
Dividend paid 0 0 0 0 0 0 0 0 0 0
Share issues and buybacks 0 0 0 0 0 0 18 2 1 0
Lease liability amortisation 0 0 0 0 0 0 0 0 0 0
Other non cash items 0 0 0 0 0 0 -0 -14 -1 0
Decrease in net IB debt 0 0 0 0 0 0 -11 -0 3 28
Balance Sheet (USDm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Goodwill 0 0 0 0 0 0 0 0 0 0
Other intangible assets 0 0 0 0 0 0 0 0 0 0
Tangible fixed assets 0 0 0 0 0 0 64 80 97 108
Right-of-use asset 0 0 0 0 0 0 0 0 0 0
Total other fixed assets 0 0 0 0 0 0 0 0 0 0
Fixed assets 0 0 0 0 0 0 64 80 97 108
Inventories 0 0 0 0 0 0 0 0 0 0
Receivables 0 0 0 0 0 0 4 8 8 8
Other current assets 0 0 0 0 0 0 0 0 0 0
Cash and liquid assets 0 0 0 0 0 0 22 20 22 51
Total assets 0 0 0 0 0 0 89 108 128 167
Shareholders equity 0 0 0 0 0 0 48 69 88 121
Minority 0 0 0 0 0 0 0 0 0 0
Total equity 0 0 0 0 0 0 48 69 88 121
Long-term debt 0 0 0 0 0 0 33 31 31 31
Pension debt 0 0 0 0 0 0 0 0 0 0
Convertible debt 0 0 0 0 0 0 0 0 0 0
Leasing liability 0 0 0 0 0 0 0 0 0 0
Total other long-term liabilities 0 0 0 0 0 0 2 10 10 16
Short-term debt 0 0 0 0 0 0 0 0 0 0
Accounts payable 0 0 0 0 0 0 7 9 7 7
Other current l iabilities 0 0 0 0 0 0 0 0 0 0
Total liabilities and equity 0 0 0 0 0 0 90 119 136 175
Net IB debt 0 0 0 0 0 0 11 11 8 -20
Net IB debt excl. pension debt 0 0 0 0 0 0 11 11 8 -20
Net IB debt excl. leasing 0 0 0 0 0 0 11 11 8 -20
Capital invested 0 0 0 0 0 0 60 79 98 109
Working capital 0 0 0 0 0 0 -4 -1 1 1
EV breakdown 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Market cap. diluted (m) na na na na na 8 63 141 264 139
Net IB debt Adj 0 0 0 0 0 0 11 11 8 -20
Market value of minority 0 0 0 0 0 0 0 0 0 0
Reversal of shares and participations 0 0 0 0 0 0 0 0 0 0
Reversal of conv. debt assumed equity 0 0 0 0 0 0 0 0 0 0
EV na na na na na 8 74 152 272 119
Capital efficiency 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Total assets turnover (%) nm nm nm nm nm nm 27.8 33.8 40.9 45.5
Working capital/sales (%) nm nm nm nm nm nm -15.2 -7.1 -0.1 1.2
Financial risk and debt serv ice 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Net debt/equity nm nm nm nm nm nm 0.23 0.16 0.09 -0.17
Net debt/market cap na na na na na 0 0.16 0.09 0.03 -0.15
Equity ratio (%) nm nm nm nm nm nm 53.2 64.3 68.7 72.5
Net IB debt adj./equity nm nm nm nm nm nm 0.23 0.16 0.09 -0.17
Current ratio nm nm nm nm nm nm 3.41 3.18 4.24 8.21
EBITDA/net interest na na na na na na 1.07 4.75 7.83 12.43
Net IB debt/EBITDA nm nm nm nm nm nm 3.21 0.49 0.23 -0.39
Net IB debt/EBITDA lease Adj nm nm nm nm nm nm 3.21 0.49 0.23 -0.39
Interest cover nm nm nm nm nm nm 0.41 3.95 6.57 10.39
Maha Energy
9 March 2020 ABG Sundal Collier 37
Source: ABG Sundal Collier, Company data
Valuation and Ratios (USDm) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Shares outstanding adj. 0 0 0 0 0 7 87 98 99 100
Fully diluted shares Adj 0 0 0 0 0 7 87 98 99 100
EPS 0 0 0 0 0 0 -0.03 0.25 0.18 0.31
Dividend per share Adj 0 0 0 0 0 0 0 0 0 0
EPS Adj 0 0 0 0 0 0 -0.03 0.25 0.18 0.31
BVPS 0 0 0 0 0 0 0.55 0.71 0.88 1.21
BVPS Adj 0 0 0 0 0 0 0.55 0.71 0.88 1.21
Net IB debt / share na na na na na 0 0.1 0.1 0.1 -0.2
Share price na na na na na 1.13 0.73 1.45 2.66 1.39
Market cap. (m) na na na na na 8 63 141 264 139
Valuation 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
P/E na na na na na nm -23.0 5.7 14.7 4.5
EV/sales na na na na na nm 5.98 4.57 5.66 1.77
EV/EBITDA na na na na na nm 21.8 6.8 7.8 2.3
EV/EBITA na na na na na nm 56.7 8.2 9.3 2.7
EV/EBIT na na na na na nm 56.7 8.2 9.3 2.7
Dividend yield (%) na na na na na 0 0 0 0 0
FCF yield (%) na na na na na 0 -48.3 3.1 0.6 18.8
Lease adj. FCF yield (%) na na na na na 0 -48.3 3.1 0.6 18.8
P/BVPS na na na na na nm 1.33 2.04 3.01 1.15
P/BVPS Adj na na na na na nm 1.33 2.04 3.01 1.15
P/E Adj na na na na na nm -23.0 5.7 14.7 4.5
EV/EBITDA Adj na na na na na nm 21.8 6.8 7.8 2.3
EV/EBITA Adj na na na na na nm 56.7 8.2 9.3 2.7
EV/EBIT Adj na na na na na nm 56.7 8.2 9.3 2.7
EV/cap. employed na na na na na nm 0.9 1.5 2.3 0.8
Inv estment ratios 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Capex/sales nm nm nm nm nm nm 21.9 46.6 58.9 28.8
Capex/depreciation nm nm nm nm nm nm 130.5 413.1 499.6 227.6
Capex tangibles/tangible fixed assets nm nm nm nm nm nm 4.3 19.5 29.1 17.9
Capex intangibles/definite intangibles nm nm nm nm nm nm nm nm nm nm
Depreciation on intangibles/definite intangiblesnm nm nm nm nm nm nm nm nm nm
Depreciation on tangibles/tangibles nm nm nm nm nm nm 3.3 4.7 5.8 7.9
Maha Energy
9 March 2020 ABG Sundal Collier 38
Analyst certification I/We, Eirik Thune Øritsland, Karl Fredrik Schjøtt-Pedersen, the author(s) of this report, certify that not withstanding the existence of any such potential conflicts of interests referred to below, the views expressed in this report accurately reflect my/our personal view about the companies
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Maha Energy
9 March 2020 ABG Sundal Collier 39
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Maha Energy
9 March 2020 ABG Sundal Collier 40
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