BG, Galp, Repsol Set for Uplift on Brazil Santos Basin, DB Says
2014-06-25 11:27:40.86 GMT
By James Cone
June 25 (Bloomberg) -- Increasingly confident on progress
at Brazil Santos Basin, sees “meaningful uplift” to financial
momentum over 18 months from 3Q for BG Group, Galp and Repsol,
Deutsche Bank says in note dated June 24.
* DB: data points on flow rates, pre-drilled wells building
momentum for delivery phase; sees wave of ramp-ups/start-ups
to prompt reassessment of risk/value
* Success can prompt cash flow from ops. uplift vs 2013 of
20% for BG, 25% for Galp, 8% for Repsol
* Says for BG (buy, PT 1,400p) Brazil is 40% NAV, 20% of
2015 cash flow from ops.; mgmt. focused on delivery of
long-term value, would be wrong point to trim Brazil
* Galp (buy, PT EU15) from 3Q can break from relative
stagnation of last 20 months as Brazil production builds
up; weak downstream sees 2014 EPS cut to EU0.33 vs
consensus EU0.36
* Repsol (hold) likely to see FCF breakeven from Brazil in
2014, move strongly positive in 2015
* NOTE June 23: BG Should Demerge LNG Business to Release
Value: Deutsche Bank
* NOTE June 2: Repsol Said to Turn to Ex-YPF Executive to Run
Brazil Unit
* NOTE March 4: Galp Increases Investment Outlook to Focus on
Brazil, Mozambique
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To contact the reporter on this story:
James Cone in London at +44-20-7673-2572 or
jcone@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
2014-06-25 11:27:40.86 GMT
By James Cone
June 25 (Bloomberg) -- Increasingly confident on progress
at Brazil Santos Basin, sees “meaningful uplift” to financial
momentum over 18 months from 3Q for BG Group, Galp and Repsol,
Deutsche Bank says in note dated June 24.
* DB: data points on flow rates, pre-drilled wells building
momentum for delivery phase; sees wave of ramp-ups/start-ups
to prompt reassessment of risk/value
* Success can prompt cash flow from ops. uplift vs 2013 of
20% for BG, 25% for Galp, 8% for Repsol
* Says for BG (buy, PT 1,400p) Brazil is 40% NAV, 20% of
2015 cash flow from ops.; mgmt. focused on delivery of
long-term value, would be wrong point to trim Brazil
* Galp (buy, PT EU15) from 3Q can break from relative
stagnation of last 20 months as Brazil production builds
up; weak downstream sees 2014 EPS cut to EU0.33 vs
consensus EU0.36
* Repsol (hold) likely to see FCF breakeven from Brazil in
2014, move strongly positive in 2015
* NOTE June 23: BG Should Demerge LNG Business to Release
Value: Deutsche Bank
* NOTE June 2: Repsol Said to Turn to Ex-YPF Executive to Run
Brazil Unit
* NOTE March 4: Galp Increases Investment Outlook to Focus on
Brazil, Mozambique
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
James Cone in London at +44-20-7673-2572 or
jcone@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net