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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 2019 2020e 2021e
Sales 151 96 111
Sales growth (%) -4,1 -36,4 15,5
EBITDA 85 45 53
EBITDA margin (%) 56,3 46,7 48,1
EBIT adj 37 4 18
EBIT adj margin (%) 24,7 4,6 16,3
Pretax profit 38 6 19
EPS rep 1,05 0,17 0,58
EPS growth (%) -39,4 -83,6 238,2
EPS adj 1,05 0,17 0,58
DPS 0,79 0,53 0,23
EV/EBITDA (x) 2,6 2,4 2
EV/EBIT adj (x) 5,8 24,8 6
P/E (x) 8,1 29 8,6
P/E adj (x) 8,1 29 8,6
EV/sales (x) 1,4 1,1 1
FCF yield (%) 7,9 5,2 5
Dividend yield (%) 9,2 10,7 4,6
Net IB debt/EBITDA -0,9 -1,2 -1
N/A N/A N/A
USDm 2019 2020e 2021e
Sales 151 96 111
COGS -59 -51 -57
Gross profit 92 45 53
Other operating items -8 0 0
EBITDA 85 45 53
Depreciation on tangibles -48 -40 -35
Depreciation on intangibles 0 0 0
EBITA 37 4 18
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 37 4 18
Other financial items 0 0 0
Net financial items 1 1 1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 38 6 19
Tax 0 0 0
Net profit 38 6 19
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 38 6 19
EPS 1,05 0,17 0,58
EPS Adj 1,05 0,17 0,58
Total extraordinary items after tax 0 0 0
Tax rate (%) 0 0 0
Gross margin (%) 61,2 46,7 48,1
EBITDA margin (%) 56,3 46,7 48,1
EBITA margin (%) 24,7 4,6 16,3
EBIT margin (%) 24,7 4,6 16,3
Pretax margin (%) 25,2 5,9 17,4
Net margin (%) 25,2 5,9 17,4
Growth rates Y/Y 2019 2020 2021
Sales growth (%) -4,1 -36,4 15,5
EBITDA growth (%) -20,4 -47,2 19,1
EBIT growth (%) -38,7 -88,1 308,2
Net profit growth (%) -38,7 -85 238,2
EPS growth (%) -39,4 -83,6 238,2
Profitability 2019 2020 2021
ROE (%) 14 2,1 7,3
ROE Adj (%) 14 2,1 7,3
ROCE (%) 14,5 3 7,3
ROCE Adj(%) 14,5 3 7,3
ROIC (%) 17,9 2,1 8,2
ROIC Adj (%) 17,9 2,1 8,2
Adj earnings numbers 2019 2020 2021
EBITDA Adj 85 45 53
EBITDA Adj margin (%) 56,3 46,7 48,1
EBITA Adj 37 4 18
EBITA Adj margin (%) 24,7 4,6 16,3
EBIT Adj 37 4 18
EBIT Adj margin (%) 24,7 4,6 16,3
Pretax profit Adj 38 6 19
Net profit Adj 38 6 19
Net profit to shareholders Adj 38 6 19
Net Adj margin (%) 25,2 5,9 17,4
N/A N/A N/A
USDm 2019 2020e 2021e
EBITDA 85 45 53
Net financial items 1 1 1
Paid tax 0 0 0
Non-cash items 1 0 0
Cash flow before change in WC 86 46 55
Change in WC 3 8 0
Operating cash flow 89 54 55
CAPEX tangible fixed assets -65 -46 -37
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 1 0 -9
Free cash flow 24 9 8
Dividend paid -29 -18 -8
Share issues and buybacks 0 -7 0
Other non cash items 6 -1 0
Decrease in net IB debt 3 -21 1
Balance Sheet (USDm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 0 0 0
Tangible fixed assets 212 217 228
Other fixed assets 1 0 0
Fixed assets 212 218 229
Inventories 12 6 6
Receivables 0 0 0
Other current assets 0 0 0
Cash and liquid assets 76 55 56
Total assets 300 279 290
Shareholders equity 276 259 270
Minority 0 0 0
Total equity 276 259 270
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 11 10 10
Short-term debt 0 0 0
Accounts payable 0 0 0
Other current liabilities 13 9 9
Total liabilities and equity 300 279 290
Net IB debt -76 -55 -56
Net IB debt excl. pension debt -76 -55 -56
Capital invested 211 214 225
Working capital -1 -3 -3
EV breakdown 2019 2020 2021
Market cap. diluted (m) 293 165 165
Net IB debt Adj -76 -55 -56
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 217 110 109
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 51 33,1 39
Capital invested turnover (%) 72,8 45,1 50,5
Capital employed turnover (%) 55,5 35,8 41,8
Inventories / sales (%) 10,1 9,4 5,2
Customer advances / sales (%) 0 0 0
Payables / sales (%) 0,3 0 0
Working capital / sales (%) 0,9 -2 -3
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -27,6 -21,3 -20,7
Net debt / market cap (%) -29,4 -33,5 -33,9
Equity ratio (%) 92 92,9 93,2
Net IB debt adj. / equity (%) -27,6 -21,3 -20,7
Current ratio (%) 681,4 668,9 676,8
EBITDA / net interest (%) -10612,5 -3534,9 -4469,2
Net IB debt / EBITDA (%) -89,8 -123,1 -104,8
Interest cover (%) 2633,3 336,3 122310,2
N/A N/A N/A
USDm 2019 2020e 2021e
Shares outstanding adj. 34 33 33
Fully diluted shares Adj 34 33 33
EPS 1,05 0,17 0,58
Dividend per share Adj 0,8 0,5 0,2
EPS Adj 1,05 0,17 0,58
BVPS 8,05 7,83 8,18
BVPS Adj 8,05 7,83 8,18
Net IB debt / share -2,2 -1,7 -1,7
Share price 7,54 4,98 4,98
Market cap. (m) 259 165 165
Valuation 2019 2020 2021
P/E 8,1 29 8,6
EV/sales 1,44 1,14 0,98
EV/EBITDA 2,6 2,4 2
EV/EBITA 5,8 24,8 6
EV/EBIT 5,8 24,8 6
Dividend yield (%) 9,2 10,7 4,6
FCF yield (%) 7,9 5,2 5
P/BVPS 1,06 0,64 0,61
P/BVPS Adj 1,06 0,64 0,61
P/E Adj 8,1 29 8,6
EV/EBITDA Adj 2,6 2,4 2
EV/EBITA Adj 5,8 24,8 6
EV/EBIT Adj 5,8 24,8 6
EV/cap. employed 0,8 0,4 0,4
Investment ratios 2019 2020 2021
Capex / sales 43,1 47,5 33,6
Capex / depreciation 136,5 112,9 105,5
Capex tangibles / tangible fixed assets 30,8 21 16,3
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 22,5 18,6 15,5
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 % 31 Aug 2020
Liontrust 3.4 % 3.4 % 31 Aug 2020
Avanza Pension 3.1 % 3.1 % 31 Aug 2020
Adage Capital Management 2.9 % 2.9 % 7 May 2020
JP Morgan Asset Management 2.4 % 2.4 % 31 Aug 2020
Carl Erik Norman 1.8 % 1.8 % 31 Aug 2020
Nordnet Pensionsförsäkring 1.8 % 1.8 % 31 Aug 2020
Jan Risberg 1.7 % 1.7 % 7 May 2020
Schroders 1.5 % 1.5 % 31 Jul 2020
Source: Holdings by Modular Finance AB