Petronor E&P Q1 2025 slides: cash position surges despite production dip

Petronor E&P (OL:PNOR) presented its Q1 2025 results on May 20, highlighting a substantial increase in cash reserves despite lower production volumes. The company’s focus on shareholder returns and strategic portfolio management remains central to its business approach as it prepares for production growth in the second half of the year.

Quarterly Performance Highlights

Petronor reported Q1 2025 net working interest production of 4,321 barrels of oil per day (bopd), down from 4,759 bopd in the previous quarter. The company attributed this decline to anticipated reservoir depletion and the temporary shut-in of two high-rate wells.

As shown in the following production chart, this represents the lowest quarterly production figure in the past two years, continuing a gradual downward trend since 2023:

Despite the production decrease, Petronor’s financial position strengthened considerably during the quarter. Cash at bank surged to $107.5 million as of March 31, 2025, representing a 35% increase from $79.7 million at the end of December 2024. This growth occurred even as gross assets declined from $301.2 million to $264.9 million during the same period.

The company’s revenue for Q1 2025 was $13.9 million, significantly lower than the $44.3 million reported for Q1 2024. However, cash flows from operations remained strong at $55.4 million, matching the figure from the same period last year.

Financial Analysis

Petronor’s cash position improvement was driven by several factors, as illustrated in the following source and use of cash breakdown:

The waterfall chart shows that while the company faced operational expenses of $9.9 million and administrative costs of $2.6 million, these were offset by $13.9 million from assignment of tax oil and royalties. The most significant contributor to the cash increase was a $54.4 million positive working capital movement, while capital expenditures remained modest at $2.8 million.

The company’s oil sales and inventory position is expected to fluctuate throughout 2025, with planned liftings in June and December:

Shareholder Returns

Petronor continues to prioritize shareholder returns, having already distributed 2.0 NOK per share as a capital repayment in January 2025. The board has proposed an additional 2.2 NOK per share repayment for approval at the Annual General Meeting scheduled for May 21, 2025.

The following chart illustrates the company’s strong share price performance, which has increased by 36.64% over the past year:

According to the presentation, total shareholder return over the past 12 months will reach approximately 78% following AGM approval of the latest capital repayment. This aligns with management’s stated strategy of "maximising value of existing portfolio and returning cash to shareholders."

Strategic Portfolio Management

Petronor maintains a diversified portfolio across West Africa, with assets in various stages of development:

The company’s core production asset remains its 16.83% working interest in the PNGF Sud/Bis fields in Congo-Brazzaville, which produce approximately 26,000 bopd gross. Recent infrastructure investments have improved production efficiency, and an infill drilling program focusing on five wells in Tchibouela East is scheduled to commence in the second half of 2025.

Forward-Looking Statements

Looking ahead, Petronor expects production to increase in the second half of 2025 as the infill drilling program takes effect. The company also anticipates an oil inventory build in the second half of the year to support a potential Q4 lifting.

On the regulatory front, Petronor reported that the Department of Justice in the United States has closed its investigation into the company. However, the investigation by Økokrim in Norway, which began in 2021, remains ongoing, with more clarity expected in the second half of 2025.

This represents a significant development since the Q4 2024 earnings report, which had mentioned the DOJ investigation as still ongoing. The resolution of this regulatory matter removes one uncertainty for investors, though the Norwegian investigation continues to present a potential risk.

Petronor’s stock closed at 13.4 NOK on May 19, 2025, down 1.03% ahead of the results presentation, but remains well above its 52-week low of 7.95 NOK.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.