Analysts set target price 1.40 -1.50 NOK late 2019. The blocks in The Gambia and Senegal was set to zero value (more or less). The conclusion in the reports should an amicable solution be reached has a significant impact on the share price. We are partly there now. For instant Arctic wrote in their report 2019 that "A future high-impact trigger would also be a settlement in the ongoing arbitration process relating to the exploration licenses in Gambia and Senegal, though we do not expect any clarification before mid-2020." . Keywords "significant impact".

Block A4 in The Gambia is reinstated, and with improved condition according to PNOR :

"Under the terms of the settlement agreement, PetroNor will regain the A4 license and sign a 30-year lease under new terms. Further, PetroNor will relinquish any claims related to A1 license that has subsequently been awarded to a major oil company ".

"This settlement results in PetroNor regaining 100% interest in a highly prospective Block in one of the most exciting hydrocarbon basins in the world. The terms of the new license are significantly more attractive and will enhance not only the value of the license but also its attractiveness to potential partners. Importantly, we have a year to decide if we wish to proceed with the lease agreement, and we would expect to have seen drilling on the adjacent A1 license during this timeframe which will mean we are far better placed to make commercial and technical decisions regarding the next steps associated with our license."

My comments:
Valued 2019 by Sparebank Markets to be 0.09 NOK/share, based on 10% chance of amicable solution and with 20% ownership. That has now been changed to 100% on both parameters. Which means a rough additional value of 4.5 NOK per share (0.09/(0.1x0.2)). Lets assume a partner will get 60-70% ownership in exchange for the cost. Hence fair value of about 1.5 NOK per share.



Senegal Offshore Deep block off Casamance is about to reach an amicable solution, I think:

"The agreement to suspend the arbitration follows a period of progressive dialogue between the Company and relevant authorities"

My comment:
If we apply similar assumptions to this block as well a fair value would be 1.5 NOK per share. Assumption is that ROP will be kept by Total.




My conclusion: Fair share price as of 30.10.2020 ought to be 2.5 - 3.0 NOK.
A fair value including recent progress in cases against The Gambia and Senegal would be 1.5 NOK (includes everything but not A4 and SOSP) + 1.5 NOK (A4) + 1.5 NOK (SOSP) = 4.5 NOK per share.

Hence, given present trading range 1.30-1.40 NOK there ought to be significant upside towards 3-4 NOK and very limited downside.

Should in addition bid on Anadarko in Ghana be successful short term upside will be significant. Several NOK, potentially.



Analyst Coverage:
https://petronorep.com/media/1298/20191210_arctic_initiation-of-coverage.pdf

https://petronorep.com/media/1299/20191021_sparebank-1_panoro-aje-deal.pdf


Trigger list and webinars below, copied from FkL (https://finansavisen.no/forum/thread/114306/view/0/0?page=11)
List will be amended as changes/decision comes in.

19.09.20 - Amicable agreement with The Gambia regarding block A1 and A4. (significant impact on share price, however not seen in share price at all, yet)
26.10.20 - 180 dagers sakspause med forhandlinger i Senegal - børsmelding
02.11.20 - Extension one week "180 dagers sakspause med forhandlinger i Senegal - børsmelding"
31.10.20 - Avklaring budrunde Anadarko 30.000 bpd i Ghana
05.11.20 - Company Webinar with SpareBank1 Markets
xx.xx.20 - Nigeria Marginal license round - kunngjøring av vinnere
XX.11.20 - Myndighetsgodkjennelse Nigeria Aje
XX.11.20 - Fordelingsvurdering aksjer/kontanter Aje oppgjør, innføring av nye aksjer
XX.11.20 - Produksjonsøkning (Aje) + 320 bpd
05.11.20 - ICSID sakspause ROP/SOSP Senegal
30.11.20 - Q3-rapport 2020 - Forventet snittpris på salg av olje $43
XX.12.20 - Flytting av selskapet fra Australia til Norge
XX.12.20 - Avvikling av styremedlemmer i Australia
15.12.20 - Senegal license round
31.12.20 - Avtalefrist forhandlinger nytt oljefelt PNGF Bis
31.12.20 - Mulig Koronavaksine
XX.XX.20 - Flaringavtale via Bream Energy. Vi er godkjent og har bud inne.
XX.XX.20 - Innfill drilling via nyinstallert Wellhead plattform på PNGF Sud i Kongo - produksjonsøkning
XX.XX.20 - FAR skal borre på A2 lisensen
XX.XX.21 - BP skal borre på A1 i Gambia
01.04.21 - Total skal trolig borre på ROP
01.30.21 - Extension three month "180 dagers sakspause med forhandlinger i Senegal - børsmelding"
XX.XX.21 - Det skal borres tre nye brønner på Aje i Nigeria
19.09.21 - Avklaring videre aktivitet A4 i Gambia
31.12.23 - 30.000 BOEPD produksjon