Production guidance lowered to 3.7-4.0kboe/d (4.0-5.0)
Capex guidance increased USD 24.2m (USD 15.5m)
Operational hiccups should be known in the market
Production guidance implies lower Q4 production
Last night, Maha announced a guidance update for the end of 2020. It states that FY’20 production should be 5% below the previous guidance range of 4,000-5,000boe/d. This implies production of 3,800boe/d. The company provides a guidance range of 3,700-4,000boe/d. The lowered guidance is a result of operational hiccups in Q3 (a blanking sleeve was stuck and needed to be retrieved from the GTE-4 well), and activity has also been hampered by COVID-19; for example, Maha has had ten cases amongst staff and contracted personnel in Brazil. It appears that some of these hiccups have extended into Q4. In our estimates, we had a FY’20 production estimate of 3,960boe/d, and consequently we make a slightly negative revision to our Q4 production estimates, to end with a full-year production of 3,800boe/d. This drives our 3.8% negative revision to ‘20e revenues. The exit rate is guided at 5,200-5,700 boe/d. This is in line with our previous estimate for Q1’21, which we keep unchanged.
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