Divestment of Oman…
With the divestment of its interest in Block 70 in Oman, Maha has continued its transformation. It will receive USD 2m upon this closing, and there is a potential for another USD 12m when certain milestones have been met. We had already removed Oman from our forecasts, which are thus unchanged. Group production has continued increasing q/q, with Q4 up 13% so far versus from Q3 and production currently at 80–90% of the level before the Maha Brazil divestment (completed in February 2023). We expect production to keep ramping up in the coming quarters.

…opens up for new transactions
Before the decision on how to move forward with Oman, we believe Maha needed to keep its cash position relatively intact to be able to expand drilling, should it declare commerciality. Following the divestment of Oman, the probability for transactions in the near term has increased, in our view. We believe any larger deal could be partly financed by debt and that Maha has fire power of USD 200–250m. Assuming similar multiples to the DBO transaction implies Maha could potentially add NPV of ~USD 1bn versus its current asset base of ~USD 170m. Any such transaction would be a game-changer for Maha.
 
Venezuela provides optionality
In October, Maha announced the signing of an exclusive agreement allowing it to indirectly acquire 24% of PetroUrdaneta, operating in Venezuela. Including extending the exclusivity to 21 months and full earn-outs, the total price would be EUR 27m. There is limited data on the asset, making it difficult to value, but closing the transaction would increase Maha’s resources from 22 mmboe to 192 mmboe, indicating the potential. Venezuela is not reflected in our fair value; we consider it to be optionality.

Read the full report, published on 14-12-2023 at 12:36 PM: https://researchdocs.carnegie.se/research/2023/12/14/maha231214_new.pdf
This is a press release from Carnegie Investment Bank. Read more here: https://epaccess.penser.se/