Maha Energy AB (LTS:0GEA) Q1 2025 Earnings Call Highlights: Strong Production Milestones Amid ...
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Maha Energy AB (LTS:0GEA) achieved a significant production milestone with Brava reaching 21,000 barrels of equivalent per day in Q1, and further expansion in April with Atlanta increasing production to 82,000 barrels per day.
The company reported a strong financial position with over $106 million in cash and liquid investments, and it is debt-free.
Operational efficiency improved with the lowest OpEx per barrel of $15, reflecting effective cost control measures.
Maha Energy AB (LTS:0GEA) has a robust cash flow generation, with Brava delivering almost $500 million in revenue and $182 million in EBITDA.
The company is focused on high-return projects, targeting investments with returns higher than 25%, particularly in the Illinois Basin.
The company faces challenges in the Venezuelan market due to political uncertainties and is awaiting authorizations and contract negotiations.
There is a natural production decline in the Illinois Basin, impacting revenue due to lower oil prices.
Despite strong production figures, the stock price of Maha Energy AB (LTS:0GEA) is trading at a significant discount, indicating potential undervaluation.
The company has limited ability to aggressively pursue share buybacks due to blackout periods and other financial commitments.
Maha Energy AB (LTS:0GEA) is undergoing significant cost-cutting measures, including downsizing management and internal teams, which may impact operations.
Warning! GuruFocus has detected 2 Warning Signs with LTS:0GEA.
Q: Would Maha Energy be looking into investing in minerals as well? A: Yes, we are keen on exploring opportunities in the mineral space due to the solid track record of our major shareholders in this sector. We see a lot of potential in this area. (Respondent: Unidentified_2)
Q: Is Illinois the only net back operator for Maha Energy? A: Yes, currently, Illinois Basin is our main operational asset. We are focusing on cost control and identifying high-return projects within the basin, especially in the current low oil price environment. (Respondent: Unidentified_2)
Q: How can production in Brava be counted as Maha production? A: We present Brava's production on a pro forma basis. Although it's not directly our share, we support Brava in governance and expect to benefit through dividends as they deleverage. (Respondent: Unidentified_2)
Q: Why doesn't Maha Energy buy back shares more aggressively? A: We believe Maha's share price is undervalued, but restrictions such as blackout periods limit our ability to buy back shares year-round. We plan to discuss and potentially renew the buyback program at the AGM. (Respondent: Unidentified_2)
Q: Are you expecting further cash consumption for Brava investments this quarter? A: No, we are focused on cost control and expect to reduce cash consumption significantly. We've downsized management and internal teams to lower G&A expenses. (Respondent: Unidentified_2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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