The presentation from 28th Feb mentioned that Dussafu YTD production was 16,200 bbld net which seems to suggest the ESP issues were far from resolved at that point. I saw you mention in one of the posts last year that guidance then didnt include Hibiscus South coming online. Do you think the 5-6k bbl/d that came online 8th March is included in the most recent 2024 10-12m production guide ? If so, then isn't the guidance really conservative (or the ESP issues are permanent)? Has the management any history in terms of over/underpromising wrt production? Thanks for the post, good to look at this name again.
Regarding this "most recent 2024 10-12m production guide", I don't think they knew by then when the issue with the ESPs will be resolved, so it isn't a very good indication. I expect them to update the guidance with the Q1 results, after having commenced the replacement of the temporary ESP by the definitive ones. That process should be happening right now and will be completed before end of April. The problem here is that the management doesn't have a very good history of anything, and the performance since IPO hasn't been as good as in other E&P companies. Operating a FPSO business is very different from managing the operation of oil fields: https://www.linkedin.com/in/carl-arnet-8798638
Thank you for good article! Always, I have been wondering what is the incentives that BW Group keeps BWE tradable in stock market. What could be such incentives?
Honestly, I can't say for sure what incentives it has, but I understand that by eliminating the BW Offshore overhang, they have more flexibility to sell packages of shares when the time comes. If they wanted to take BWE private, they would have to complete it during 2024.
Agree but BW Group doesn't seem honest in this one. It seems also that someone prevents Panoro from going up as well. I don't see a fuckin good reason to have a oil company with almost 15% dividend and that low P/E. I keep buying but it is really frustrating. What if oil decrease to 80, woukd the stock decrease to 25?!!!!!!
I understand the frustration; however, there are occasions when E&P companies make all the return that have been anticipated for the past year within a mere few weeks. IMO, there is 0 chance of not having a good return.
My slight concern with BW Energy is the potential information asymmetry with one large holder who is near the threshold to take the company private. Explorations seems to go well? BW Group quickly moves to acquire the rest of the shares at 32 NOK or so and BW gets all the upside. Exploration goes bad? Minority shareholders are stuck with low liquidity, mediocre company and shares trade at 15-20 NOK. It just feels like the risk is bit asymmetrical here.
I wouldn't like that, it is a risk, and I have been very vocal on Twitter against BW Group's taking the company private. I have managed to buy shares at 27.xx NOK in the last few weeks, I think the risk/reward is positive. If they take it private at 32 NOK in 2024, the return would be nice. However, I also see the asymmetry in the valuation, because Dussafu and Golfinho justify the current EV, once the problems with the expansion of Hibiscus-Ruche are resolved. Any hidden value in Kudu is pure upside, as well as Maromba's and, at some point, Kuru's development
It's interesting that w the purchase of the BW Offshore shares for 32 NOK, the BW group chairman commented: "This transaction clears a significant overhang on BW Energy shares" - as they seem to have been being distributed as dividends. Since that transaction Brent is up about 10%, Hibiscus south production news came out and.... the shares have gone nowhere.
The presentation from 28th Feb mentioned that Dussafu YTD production was 16,200 bbld net which seems to suggest the ESP issues were far from resolved at that point. I saw you mention in one of the posts last year that guidance then didnt include Hibiscus South coming online. Do you think the 5-6k bbl/d that came online 8th March is included in the most recent 2024 10-12m production guide ? If so, then isn't the guidance really conservative (or the ESP issues are permanent)? Has the management any history in terms of over/underpromising wrt production? Thanks for the post, good to look at this name again.
Regarding this "most recent 2024 10-12m production guide", I don't think they knew by then when the issue with the ESPs will be resolved, so it isn't a very good indication. I expect them to update the guidance with the Q1 results, after having commenced the replacement of the temporary ESP by the definitive ones. That process should be happening right now and will be completed before end of April. The problem here is that the management doesn't have a very good history of anything, and the performance since IPO hasn't been as good as in other E&P companies. Operating a FPSO business is very different from managing the operation of oil fields: https://www.linkedin.com/in/carl-arnet-8798638
Thank you for good article! Always, I have been wondering what is the incentives that BW Group keeps BWE tradable in stock market. What could be such incentives?
Honestly, I can't say for sure what incentives it has, but I understand that by eliminating the BW Offshore overhang, they have more flexibility to sell packages of shares when the time comes. If they wanted to take BWE private, they would have to complete it during 2024.
Why BWE if Panoro is available and having
shareholders friendly policy
BWE has more growth opportunities at the moment. I'm now long both but BWE has a bigger weight in my PF
Agree but BW Group doesn't seem honest in this one. It seems also that someone prevents Panoro from going up as well. I don't see a fuckin good reason to have a oil company with almost 15% dividend and that low P/E. I keep buying but it is really frustrating. What if oil decrease to 80, woukd the stock decrease to 25?!!!!!!
I understand the frustration; however, there are occasions when E&P companies make all the return that have been anticipated for the past year within a mere few weeks. IMO, there is 0 chance of not having a good return.
If that happens, our dividend yield will still be very good =D
My slight concern with BW Energy is the potential information asymmetry with one large holder who is near the threshold to take the company private. Explorations seems to go well? BW Group quickly moves to acquire the rest of the shares at 32 NOK or so and BW gets all the upside. Exploration goes bad? Minority shareholders are stuck with low liquidity, mediocre company and shares trade at 15-20 NOK. It just feels like the risk is bit asymmetrical here.
I wouldn't like that, it is a risk, and I have been very vocal on Twitter against BW Group's taking the company private. I have managed to buy shares at 27.xx NOK in the last few weeks, I think the risk/reward is positive. If they take it private at 32 NOK in 2024, the return would be nice. However, I also see the asymmetry in the valuation, because Dussafu and Golfinho justify the current EV, once the problems with the expansion of Hibiscus-Ruche are resolved. Any hidden value in Kudu is pure upside, as well as Maromba's and, at some point, Kuru's development
Thanks for sharing. Which broker do you use for BWE? I believe it's not offered by II or IG and there seems to be no US ADR version?
I use Interactive Brokers. There you can find many Norwegian stocks listed in the OSE exchange that are not available in many brokers.
Thanks :-)
It's interesting that w the purchase of the BW Offshore shares for 32 NOK, the BW group chairman commented: "This transaction clears a significant overhang on BW Energy shares" - as they seem to have been being distributed as dividends. Since that transaction Brent is up about 10%, Hibiscus south production news came out and.... the shares have gone nowhere.
Thanks for the article. Why not just buy Panoro? 15% Dividend this year. I think Panoro is poised to do the things BWE will do in 2 years now.
I don't discard owning both, but BWE gives exposure to a very unique asset in Namibia