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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 ~12,000 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 2018 2019e 2020e
Sales 157 155 151
Sales growth (%) 31,9 -1,8 -2,4
EBITDA 107 98 101
EBITDA margin (%) 67,8 63,2 66,6
EBIT adj 61 50 56
EBIT adj margin (%) 38,6 32,5 37,3
Pretax profit 62 52 58
EPS rep 1,73 1,46 1,63
EPS growth (%) 78,4 -15,5 11,4
EPS adj 1,73 1,46 1,63
DPS 0,63 0,8 0,75
EV/EBITDA (x) 1,6 1,9 1,4
EV/EBIT adj (x) 2,9 3,7 2,5
P/E (x) 4,2 5,4 4,9
P/E adj (x) 4,2 5,4 4,9
EV/sales (x) 1,1 1,2 0,9
FCF yield (%) 16 14,6 22
Dividend yield (%) 8,8 10,1 9,5
Net IB debt/EBITDA -0,7 -0,9 -1,3
USDm 2018 2019e 2020e
Sales 157 155 151
COGS -52 -57 -50
Gross profit 106 97 101
Other operating items 1 1 0
EBITDA 107 98 101
Depreciation on tangibles -46 -47 -44
Depreciation on intangibles 0 0 0
EBITA 61 50 56
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 61 50 56
Other financial items 0 0 0
Net financial items 1 2 2
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 62 52 58
Tax 0 0 0
Net profit 62 52 58
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 62 52 58
EPS 1,73 1,46 1,63
EPS Adj 1,73 1,46 1,63
Total extraordinary items after tax 0 0 0
Tax rate (%) 0 0 0
Gross margin (%) 67,2 62,9 66,6
EBITDA margin (%) 67,8 63,2 66,6
EBITA margin (%) 38,6 32,5 37,3
EBIT margin (%) 38,6 32,5 37,3
Pretax margin (%) 39,4 33,9 38,7
Net margin (%) 39,4 33,9 38,7
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 31,9 -1,8 -2,4
EBITDA growth (%) 36,8 -8,4 2,9
EBIT growth (%) 58,1 -17,3 12
Net profit growth (%) 87,3 -15,5 11,4
EPS growth (%) 78,4 -15,5 11,4
Profitability 2018 2019 2020
ROE (%) 25 19 19,3
ROE Adj (%) 25 19 19,3
ROCE (%) 26,4 19,2 19,3
ROCE Adj(%) 26,4 19,2 19,3
ROIC (%) 29 22,9 25,6
ROIC Adj (%) 29 22,9 25,6
Adj earnings numbers 2018 2019 2020
EBITDA Adj 107 98 101
EBITDA Adj margin (%) 67,8 63,2 66,6
EBITA Adj 61 50 56
EBITA Adj margin (%) 38,6 32,5 37,3
EBIT Adj 61 50 56
EBIT Adj margin (%) 38,6 32,5 37,3
Pretax profit Adj 62 52 58
Net profit Adj 62 52 58
Net profit to shareholders Adj 62 52 58
Net Adj margin (%) 39,4 33,9 38,7
USDm 2018 2019e 2020e
EBITDA 107 98 101
Net financial items 1 2 2
Paid tax 0 0 0
Non-cash items 1 1 0
Cash flow before change in WC 109 101 103
Change in WC -5 -1 0
Operating cash flow 96 96 103
CAPEX tangible fixed assets -56 -51 -40
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 1 -3 0
Free cash flow 41 42 63
Dividend paid -23 -29 -27
Share issues and buybacks 3 -2 0
Other non cash items 2 0 7
Decrease in net IB debt 31 11 42
Balance Sheet (USDm) 2018 2019 2020
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 0 0 0
Tangible fixed assets 200 204 199
Other fixed assets 0 1 1
Fixed assets 200 204 200
Inventories 18 19 19
Receivables 0 0 0
Other current assets 0 0 0
Cash and liquid assets 73 83 125
Total assets 291 307 345
Shareholders equity 268 283 322
Minority 0 0 0
Total equity 268 283 322
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 9 9 9
Short-term debt 0 0 0
Accounts payable 1 1 1
Other current liabilities 14 13 13
Total liabilities and equity 239 245 291
Net IB debt -73 -84 -126
Net IB debt excl. pension debt -73 -84 -126
Capital invested 217 222 218
Working capital 17 18 18
EV breakdown 2018 2019 2020
Market cap. diluted (m) 246 269 269
Net IB debt Adj -73 -84 -126
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 173 186 143
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 58,7 51,7 46,3
Capital invested turnover (%) 75,1 70,4 68,6
Capital employed turnover (%) 63,4 56,1 49,9
Inventories / sales (%) 9,9 12,2 12,9
Customer advances / sales (%) 0 0 0
Payables / sales (%) 0,6 0,6 0,7
Working capital / sales (%) 9,3 11,5 12,2
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -27,3 -29,5 -39,2
Net debt / market cap (%) -22,2 -31,1 -46,8
Equity ratio (%) 91,8 92,4 93,2
Net IB debt adj. / equity (%) -27,3 -29,5 -39,2
Current ratio (%) 612,8 716 1012,6
EBITDA / net interest (%) -8200 -4518,7 -4781,1
Net IB debt / EBITDA (%) -68,6 -85,7 -125,4
Interest cover (%) 1871,4 13196 N/A
USDm 2018 2019e 2020e
Shares outstanding adj. 34 34 34
Fully diluted shares Adj 34 34 34
EPS 1,73 1,46 1,63
Dividend per share Adj 0,6 0,8 0,8
EPS Adj 1,73 1,46 1,63
BVPS 7,84 8,35 9,47
BVPS Adj 7,84 8,35 9,47
Net IB debt / share -2,1 -2,5 -3,7
Share price 9,65 7,94 7,94
Market cap. (m) 330 269 269
Valuation 2018 2019 2020
P/E 4,2 5,4 4,9
EV/sales 1,1 1,2 0,95
EV/EBITDA 1,6 1,9 1,4
EV/EBITA 2,9 3,7 2,5
EV/EBIT 2,9 3,7 2,5
Dividend yield (%) 8,8 10,1 9,5
FCF yield (%) 16 14,6 22
P/BVPS 0,92 0,95 0,84
P/BVPS Adj 0,92 0,95 0,84
P/E Adj 4,2 5,4 4,9
EV/EBITDA Adj 1,6 1,9 1,4
EV/EBITA Adj 2,9 3,7 2,5
EV/EBIT Adj 2,9 3,7 2,5
EV/cap. employed 0,6 0,7 0,4
Investment ratios 2018 2019 2020
Capex / sales 35,5 32,9 26,5
Capex / depreciation 121,8 107,2 90,3
Capex tangibles / tangible fixed assets 27,9 25 20,1
Capex intangibles / definite intangibles N/A N/A N/A
Depreciation on intangibles / definite intangibles N/A N/A N/A
Depreciation on tangibles / tangibles 22,9 23,3 22,2

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Media

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

Main shareholders - Tethys Oil

Main shareholders Share capital % Voting shares % Verified
Lansdowne Partners 10.0 % 10.0 % 6 Nov 2019
Tethys Oil AB 5.4 % 5.4 % 30 Nov 2019
Magnus Nordin 4.3 % 4.3 % 30 Nov 2019
JP Morgan Asset Management 3.2 % 3.2 % 31 Oct 2019
Liontrust 2.7 % 2.7 % 30 Nov 2019
Franklin Templeton 2.2 % 2.2 % 31 Oct 2019
Grandeur Peak Global Advisors, LLC 2.1 % 2.1 % 31 Jul 2019
Jan Risberg 2.0 % 2.0 % 9 May 2019
Avanza Pension 1.9 % 1.9 % 30 Nov 2019
Carl Erik Norman 1.7 % 1.7 % 30 Nov 2019
Source: Holdings by Modular Finance AB

Insider list - Tethys Oil

Name Quantity Code Date
William Holland + 1 514 BUY 6 Nov 2019
Magnus Nordin - 70 000 Redemp 4 Oct 2019
Magnus Nordin + 83 300 Redemp 4 Oct 2019
Fredrik Robelius - 20 000 SELL 23 Aug 2019
Fredrik Robelius - 25 000 SELL 22 Aug 2019
William Holland + 50 000 BUY 15 Aug 2019
Fredrik Robelius + 50 000 BUY 15 Aug 2019
William Holland + 1 000 BUY 15 Aug 2019
Magnus Nordin + 60 000 BUY 15 Aug 2019
Geoffrey Turbott + 2 152 BUY 17 Jun 2019

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