Waiting for the close of DBO
On February 28 the sale of the Brazilian entities for consideration of c. USD 159mn to be paid in two instalments (c. USD 96m at closing and c. USD 55mn in six months) closed. In February 2023 a business combination with DBO 2.0 (DBO) was signed and in March an EGM approved the acquisition. Now that Q1 is behind them we would expect closure – the company is not allowed to issue new shares in the month before the earnings are to be released.

Initial results from Oman are positive, expect further results in the coming 30-60 days
In conjunction with Q1 earnings the company released test results from Mafraq, which we found encouraging. Four wells have been tested and they produced a total of c. 1,350 boepd, which we find encouraging. We would expect results from the remaining four wells in the coming 1-2 months and based on the results seen so far we would expect the company to move on to the next phase in the project.
 
Deconsolidation of the Brazilian assets but significant upside in fair value
Maha has USD 110mn in cash with another USD 55mn on its way. Meanwhile market cap is close to USD 120mn – the market is obviously not assigning much value to other assets. Production in the DBO assets were at the same level as the divested Brazilian assets. We see several catalysts for the market’s view to change: 1) the closure of DBO, 2) further test results from Mafraq in Oman and 3) we see the possibility for acquisitions in the near term. We deconsolidate the Brazilian assets which make us cut EBITDA by 73-92% but want to point out that DBO is not consolidated into the numbers – Q1 is a transition quarter. Due to a change in reserves and resources we change the upper limit of our fair value range, which is now at SEK 13-20 (SEK 13-16).

Read the full report, published on 24-05-2023 at 09:32 AM: https://docs.penser.se/a/3775/Maha_Q1_2023.pdf
This is a press release from Erik Penser Bank. Read more here: https://epaccess.penser.se/