• Q4 Revenue: $106 million.
• Q4 EBITDA: $50 million.
• Q4 Net Profit: $32 million.
• Full Year Revenue: $285 million.
• Full Year EBITDA: $152 million.
• Full Year Net Profit: $56 million.
• Cash Position: $73 million.
• Gross Debt: $145.9 million.
• Net Debt: $73 million.
• 2024 Distributions: NOK246 million.
• Production Guidance: 11,000 to 13,000 barrels a day.
• Production OpEx: $21 per barrel.
• Non-recurring Project Costs: $3 per barrel.
• 2025 Distribution Target: NOK500 million.
• Quarterly Dividend: NOK80 million.
• Share Buybacks: NOK23 million worth of shares purchased.
• CapEx 2024: $100 million.
• CapEx 2025 Guidance: Approximately $35 million.
• Gross Production in Gabon: 40,000 barrels a day.
• 2P Reserves (End of 2023): 35 million barrels.
• Contingent Resource: 29 million barrels.

• Warning! GuruFocus has detected 4 Warning Signs with FRA:1PZ.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Panoro Energy ASA (FRA:1PZ) reported a strong financial performance with $106 million in revenue, $50 million in EBITDA, and a net profit of $32 million for Q4.
• The company has a robust balance sheet with a cash position of $73 million and a net debt position of $73 million.
• Production guidance for 2025 is set between 11,000 and 13,000 barrels per day, indicating potential growth from the previous year.
• Panoro Energy ASA (FRA:1PZ) announced a significant increase in shareholder distributions, targeting NOK500 million through returns of paid-in capital and share buybacks.
• The company successfully issued a senior secured bond at 10.25%, saving approximately 200 basis points compared to the previous loan, enhancing financial flexibility.

Negative Points

• The company faces challenges in Tunisia due to regulatory delays and political instability, impacting operations and decision-making.
• Oil prices underperformed compared to previous assumptions, affecting cash flow by approximately $30 million.
• The first quarter of 2025 is expected to be less eventful in terms of P&L and cash flow due to the lifting schedule.
• Capital expenditure was higher than expected in the previous year, with $100 million spent, impacting financial resources.
• Non-recurring operational expenses are anticipated, particularly in Equatorial Guinea, which could affect overall cost management.

Q & A Highlights

Q: Could you provide a breakdown of the 2025 production guidance across various assets? Also, how do you view the current M&A market, and what does the $3 per barrel non-recurrent OpEx correspond to? A: The production guidance is roughly split as 50% from Dussafu, 35% from Equatorial Guinea, and 15% from Tunisia. We are always evaluating M&A opportunities but maintain strong financial discipline. The non-recurrent OpEx mainly involves facilities maintenance and life extension projects, primarily in Equatorial Guinea.

Q: Can you explain the discrepancy between the 6% uplift in the lifting schedule and the 20% uplift in production guidance? What factors influence the production guidance range? A: The discrepancy arises from the timing of liftings versus production. The production guidance range accounts for planned and unplanned maintenance, with the lower end assuming more downtime. The midpoint of the range is a realistic target, reflecting operator budgets and maintenance schedules.

Q: What is the strategic rationale for the bond issue, and how does it compare to the increased interest payments? A: The bond issue provides a more corporate-style facility, offering flexibility beyond the reserve-based loan. It allows for expanded exploration activities and shareholder distributions. The bond was issued at a lower interest rate than the previous loan, providing financial benefits and signaling strong market confidence.

Q: Could you discuss the capital expenditure ranking and allocation process, and how do you balance growth versus maintenance expenditure? A: We prioritize maintenance CapEx to ensure long-term asset integrity, while also evaluating high-return growth opportunities. Our CapEx decisions aim for returns well above our cost of capital, typically exceeding 20-25% IRR. We are transitioning from a capital-intensive phase to a lighter period with a focus on strategic growth.

Q: What needs to happen to unlock the full potential of the Tunisian asset base, which has been constrained recently? A: The Tunisian asset is valuable but has faced delays due to political and regulatory challenges. Stability in the country and recognition of the oil and gas sector's importance are needed. We are seeing signs of progress, such as pending license extensions, which should enable further development.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.