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Given Lundin Energy’s share underperforming 25 percent from November lows compared to Norwegian sector colleague Aker BP, DNB Markets sees a more attractive development in the short term for the Swedish oil company.
The bank also notes in the analysis an emerging potential catalyst for Bask’s prospect for the PL533B license, in which Lundin Energy owns 40 percent.
“Despite the fact that drilling in the Basque Country (potential of 250 million barrels of crude oil equivalent) has been delayed, we expect results in January. The well is drilled with new seismic technology and was highlighted as the most promising in the Barents Sea program ”.
If a find is found in Bask, it would act as support for the development of Alta / Gohta, which is considered not to have independent trading profitability on its own, writes DNB Markets.
Given Lundin Energy’s “stable cash flow”, the bank expects a higher dividend where there is room for substantial improvement.
“/… / However, we estimate that the company will focus on more stable dividend growth over the next several years,” writes DNB Markets which tracks a quarterly dividend of $ 0:40, which is higher than current analyst consensus. of 0:30 dollars, and that would correspond to an increase of 60 percent from current levels and imply a direct return of 6 percent.
Lundin Energy’s share rose 8 percent on Thursday morning to SEK 237.80. It is worth noting that oil companies on the Stockholm Stock Exchange also traded on a broad front, at between 3 and 10 percent. The notable increases can be seen in the traces that OPEC member Russia and Saudi Arabia reached a compromise that means that oil production will remain at the same level in February and that production increases will be postponed until March.
Brent crude rose 0.3 percent in the morning to more than $ 54 a barrel, while WTI crude rose 0.7 percent.
