This week Pareto Securities hosted its 30th annual Energy Conference in Oslo with a record-high 2,000 participants, ~160 companies, and 1,300 investor meetings. I list below presentations that we found interesting.
Golar LNG
- Golar LNG designs, convert, owns, and operates marine infrastructure that turns natural gas into LNG. Golar is the global leader in its field.
- In the short term, the company should re-rate with the delivery of the second FLNG vessel, which is scheduled to be delivered in September, and in 1Q24, it should start its 20-year contract with BP.
- The market pricing indicates that this may not be fully reflected in the share price. The 2024 revenues and profits should double by the delivery of the vessel. Historically, GLNG was trading around 8-10 times EV/EBITDA. It trades around 8 now on 2023 projections and around 5 on 2024 projections. It indicates that 2024 is not fully reflected in the share price.
- The short-term trading opportunity is supported by the 150 million USD buyback and by the fact the company just announced its first dividends in 5 years. The yield is 5% now, and the dividend size may increase with the increased profits next year due with the operation of the second FLNG.
- GLNG is a long-term attractive play as well. Due to the Russian war, Europe is now dependent on LNG. That dependence will drive demand for FLNG. Golar is planning to add more ships. It already bought one vessel for conversion, and two other projects are assumed by the brokers.
- The second ship delivered this year is not in the price, and the additional vessels are not priced at all. Golar is the global leader in FLNG and should be the beneficiary of the LNG demand.
The most interesting aspect of the GLNG presentation was that the current FLNG is running only at 58% capacity while the new FLNG that should be delivered any moment to Golar is contracted at 90% capacity from 1Q24. It means that the revenue and profits jump might be even higher than anticipated.
Golar presentation:
https://ml-eu.globenewswire.com/Resource/Download/a1c9ab6c-6a6b-429e-a487-3c115b1b3de0
Mintra
I wrote here about Mintra several times. It is an innovative company that is focused on providing elearning courses for shipping and energy companies. Mintra generates strong cashflows and is very cheap on all metrics. The two largest shareholders will most likely take the company private. On Friday, 22/9 the largest shareholder Tjaldur, announced that it has acquired another 8.34% stake in the company. After this, the two largest shareholders own almost 60% stake in Mintra. It is only a question of time before Mintra goes private. The normal private premiums range a 50-100%. See my older posts for details.
Mintra Presentation:
Pyrum Innovations
Pyrum is a German company that recycles end-of-life tires to valuable end-products; thermolysis oil, recovered carbon black and thermolysis gas.
The company operates one of the most advanced tire recycling plants in Europe, located in Dillingen, Germany. The plant has been running commercially since May 2020, delivering oil to its offtake-partner and investor, BASF.
This year Pyrum is commissioning its second plant in Dillingen. It is expected that the plant will deliver first oil during Q3 2023.
Pyrum has a pipelne of new plants to be build around Europe. By the end of decade Pyrum should have more than 10 plants operating around Europe. We are bullish on Pyrum becoming the European tire recycling leader.
Pyrum presentation
Africa Oil
Africa Oil Corp – market cap of ~ USD 1bn, based in Canada, delves into oil and gas exploration and production in several regions, including Guyana, Namibia, Nigeria, South Africa, and the AGC – the Senegal Guinea Bissau Joint Development Zone.
The major near term catalyst is the market update on its Venus discovery. Venus is rummored to be the top five discovery of this century. AOC owns 6% stake in Venus. Total, the majority owner has a capital markets day at the end of this week, where it is expected to announce details of the Venus discovery. The details could have a material impact on AOC share price.
Africa Oil presentation
Hafnia
Hafnia is our to pick in product tankers. Thesis is simple. The Russian war resuls in products, are being transported from multiple times longer distances than they were before the war. This is very bullish for product tankers. Recent ban by Russia on exports of diesel is further bullish for product tankers.
Hafnia presentation
Disclosure:
The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.
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