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Tethys Oil

Tethys Oil

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Oil and natural gas

Tethys Oil is an independent E&P company with its core operation in Oman. Tethys is the partner on Blocks 3&4, which produces ~13,000 boe/d net to Tethys before government take. It also has some onshore production in Lithuania.

Continued production increase from blocks 3&4 in Oman is the main opportunity for Tethys Oil, where positive reserve revisions will be an important factor for sustainability. Further, Tethys Oil has balance sheet flexibility to engage in M&A activity or distribute to shareholders.

The main risks to the Tethys Oil investment case is oil price, USDSEK, continued production growth and reserve replacement. Tethys has a very strong production track record from Blocks 3&4 in Oman, a halt in production growth will be negative for the company. Also, being a “one asset play” is not favourable.

Financials

USDm 2020 2021e 2022e
Lease adj. FCF yield (%) 5,1 8,8 4,7
Lease adj. ND/EBITDA -1,1 -0,9 -0,7
Sales 101 122 138
Sales growth (%) -33 21 12,6
EBITDA 50 69 83
EBITDA margin (%) 49,8 56,3 60,2
EBIT adj 6 32 45
EBIT adj margin (%) 5,7 26,2 32,6
Pretax profit 3 33 46
EPS rep 0,1 1 1,4
EPS growth (%) -90,5 904,6 39,4
EPS adj 0,1 1 1,4
DPS 0,53 0,46 0,64
EV/EBITDA (x) 2,8 2,9 2,5
EV/EBIT adj (x) 24,7 6,1 4,6
P/E (x) 60,2 7,8 5,6
P/E adj (x) 60,2 7,8 5,6
EV/sales (x) 1,4 1,6 1,5
FCF yield (%) 5,1 8,8 4,7
Dividend yield (%) 8,9 5,8 8,2
Net IB debt/EBITDA -1,1 -0,9 -0,7
N/A N/A N/A
USDm 2020 2021e 2022e
Depreciation and amortisation -45 -37 -38
Of which leasing depreciation 0 0 0
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
Sales 101 122 138
COGS -51 -54 -55
Gross profit 50 69 83
Other operating items 0 0 0
EBITDA 50 69 83
Depreciation on tangibles -45 -37 -38
Depreciation on intangibles 0 0 0
EBITA 6 32 45
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 6 32 45
Other financial items 0 0 0
Net financial items -3 1 1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 3 33 46
Tax 0 0 0
Net profit 3 33 46
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 3 33 46
EPS 0,1 1 1,4
EPS Adj 0,1 1 1,4
Total extraordinary items after tax 0 0 0
Tax rate (%) 0 0 0
Gross margin (%) 49,8 56,3 60,2
EBITDA margin (%) 49,8 56,3 60,2
EBITA margin (%) 5,7 26,2 32,6
EBIT margin (%) 5,7 26,2 32,6
Pretax margin (%) 3,3 27,1 33,5
Net margin (%) 3,3 27,1 33,5
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -33 21 12,6
EBITDA growth (%) -40,8 36,8 20,5
EBIT growth (%) -84,4 453,4 40,1
Net profit growth (%) -91,3 904,6 39,4
EPS growth (%) -90,5 904,6 39,4
Profitability 2020 2021 2022
ROE (%) 1,2 12,4 16
ROE Adj (%) 1,2 12,4 16
ROCE (%) 4 12,4 16
ROCE Adj(%) 4 12,4 16
ROIC (%) 2,7 14,6 18,6
ROIC Adj (%) 2,7 14,6 18,6
Adj earnings numbers 2020 2021 2022
EBITDA Adj 50 69 83
EBITDA Adj margin (%) 49,8 56,3 60,2
EBITA Adj 6 32 45
EBITA Adj margin (%) 5,7 26,2 32,6
EBIT Adj 6 32 45
EBIT Adj margin (%) 5,7 26,2 32,6
Pretax profit Adj 3 33 46
Net profit Adj 3 33 46
Net profit to shareholders Adj 3 33 46
Net Adj margin (%) 3,3 27,1 33,5
N/A N/A N/A
EBITDA lease Adj 50 69 83
EBITDA lease Adj margin (%) 49,8 56,3 60,2
USDm 2020 2021e 2022e
Lease liability amortisation 0 0 0
Other intangible assets 0 0 0
Right-of-use asset 0 0 0
Total other fixed assets 0 0 0
Leasing liability 0 0 0
Total other long-term liabilities 13 13 13
Net IB debt excl. leasing -55 -63 -54
Net IB debt / EBITDA lease Adj (%) -110,1 -92 -65,4
EBITDA 50 69 83
Net financial items -3 1 1
Paid tax 0 0 0
Non-cash items 0 0 0
Cash flow before change in WC 48 70 84
Change in WC 8 0 0
Operating cash flow 56 70 84
CAPEX tangible fixed assets -45 -47 -72
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 10 23 12
Dividend paid -18 -15 -21
Share issues and buybacks -9 0 0
Other non cash items -3 0 0
Decrease in net IB debt -21 8 -9
Balance Sheet (USDm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 0 0 0
Tangible fixed assets 215 226 260
Other fixed assets 0 0 0
Fixed assets 216 226 260
Inventories 9 9 9
Receivables 0 0 0
Other current assets 0 0 0
Cash and liquid assets 55 63 54
Total assets 280 299 323
Shareholders equity 258 276 301
Minority 0 0 0
Total equity 258 276 301
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 13 13 13
Short-term debt 0 0 0
Accounts payable 0 0 0
Other current liabilities 10 10 10
Total liabilities and equity 280 299 323
Net IB debt -55 -63 -54
Net IB debt excl. pension debt -55 -63 -54
Capital invested 215 225 259
Working capital -1 -1 -1
EV breakdown 2020 2021 2022
Market cap. diluted (m) 199 260 260
Net IB debt Adj -55 -63 -54
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 143 197 206
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 34,8 42,3 44,3
Capital invested turnover (%) 47,5 55,6 56,9
Capital employed turnover (%) 37,8 45,8 47,7
Inventories / sales (%) 10,7 7,6 6,7
Customer advances / sales (%) 0 0 0
Payables / sales (%) 0 0 0
Working capital / sales (%) -0,5 -0,4 -0,4
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -21,5 -23 -18
Net debt / market cap (%) -30,7 -24,4 -20,9
Equity ratio (%) 91,9 92,4 93
Net IB debt adj. / equity (%) -21,5 -23 -18
Current ratio (%) 660,2 741,1 648,5
EBITDA / net interest (%) 2012 -6532,9 -6735,6
Net IB debt / EBITDA (%) -110,1 -92 -65,4
Interest cover (%) 145,2 210633 293519,3
N/A N/A N/A
USDm 2020 2021e 2022e
Lease adj. FCF yield (%) 5,1 8,8 4,7
Shares outstanding adj. 33 33 33
Fully diluted shares Adj 33 33 33
EPS 0,1 1 1,4
Dividend per share Adj 0,5 0,5 0,6
EPS Adj 0,1 1 1,4
BVPS 7,8 8,35 9,11
BVPS Adj 7,8 8,35 9,11
Net IB debt / share -1,7 -1,9 -1,6
Share price 5,47 7,87 7,87
Market cap. (m) 181 260 260
Valuation 2020 2021 2022
P/E 60,2 7,8 5,6
EV/sales 1,42 1,61 1,49
EV/EBITDA 2,8 2,9 2,5
EV/EBITA 24,7 6,1 4,6
EV/EBIT 24,7 6,1 4,6
Dividend yield (%) 8,9 5,8 8,2
FCF yield (%) 5,1 8,8 4,7
P/BVPS 0,77 0,94 0,86
P/BVPS Adj 0,77 0,94 0,86
P/E Adj 60,2 7,8 5,6
EV/EBITDA Adj 2,8 2,9 2,5
EV/EBITA Adj 24,7 6,1 4,6
EV/EBIT Adj 24,7 6,1 4,6
EV/cap. employed 0,6 0,7 0,7
Investment ratios 2020 2021 2022
Capex / sales 44,9 38,4 52,3
Capex / depreciation 102 128 189,6
Capex tangibles / tangible fixed assets 21,1 20,8 27,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 20,7 16,3 14,6
N/A N/A N/A

Equity research

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Media

Tethys Oil - Company presentation with CEO Magnus Nordin
Tethys Oil - Interview with CEO Magnus Nordin

Main shareholders - Tethys Oil

Main shareholders Share capital % Voting shares % Verified
Lansdowne Partners 10.0 % 10.0 % 7 May 2020
Magnus Nordin 4.7 % 4.7 % 28 Feb 2021
Avanza Pension 3.8 % 3.8 % 28 Feb 2021
Adage Capital Management 2.9 % 2.9 % 7 May 2020
Liontrust 2.3 % 2.3 % 31 Jan 2021
Carl Erik Norman 2.1 % 2.1 % 28 Feb 2021
Nordnet Pensionsförsäkring 2.0 % 2.0 % 28 Feb 2021
Jan Risberg 1.7 % 1.7 % 7 May 2020
Schroders 1.4 % 1.4 % 31 Jan 2021
Tethys Oil AB 1.3 % 1.3 % 28 Feb 2021
Source: Holdings by Modular Finance AB