Maha Energy is an oil and gas producer operating two fields in Brazil (Tie and Tartaruga). It has minor operations in the LAK field in the US. Its strategy is a combination of production, pursuing upside in its portfolio from production drilling and appraisal, and modest near-field exploration activity. It also looks for growth through M&A with a broad mandate, focusing on onshore oil and gas. Its main operation is enhanced oil recovery (EOR) through the development of proven hydrocarbon reserves
Contingent on positive results from testing operations, and an expected renewal of the Tartaruga Block concession, a full field development could increase the commercial lifetime of the field and utilisation of the reservoir. With its robust capital structure, the company is also well-positioned for more M&A to diversify its operations. Also, Lak Ranch is not included in our valuation, providing interesting opportunities for our estimates.
Maha Energy is exposed to adverse changes in oil and gas prices. The functional currencies are USD, SEK and BRL, while the trading currency is SEK, i.e. it is exposed to adverse currency fluctuations. The company is also exposed to its contractors’ ability to execute projects according to the schedule and on budget, including infrastructure in place and offtake capacity, with limited diversification between assets. Operating in several countries, with various political and regulatory regimes, the company is exposed to adverse changes in regulatory and political regimes.