MOL raises profit guidance on oil field acquisition

Crops

Hungarian oil and gas company MOL said it has raised its guidance for 2020 EBITDA, cleared of one-off effects and adjusted for current cost of supplies (CCS), to USD 2.4-2.6 billion in a presentation to investors on Thursday.

MOL said it had upgraded the guidance to reflect the contribution of its recent acquisition of exploration and production as well as midstream stakes in Azerbaijan.

MOL announced on Monday that it had agreed to acquire a 9.57% stake in the Azeri-Chirag-Gunashli oil field in the Caspian Sea, one of the largest offshore oil fields in the world, and an 8.9% stake in the pipeline that transports the crude to a port on the Mediterranean Sea, for USD 1.57 bln from U.S. energy giant Chevron.

“Normalized clean CCS EBITDA guidance is raised to USD 2.4-2.6 bln for 2020 to reflect the contribution of the recent acquisition from H2 2020,” MOL said in a stock exchange filing, cited by news wire Reuters. “EBITDA is then expected to gradually approach USD 3 bln by 2023 as all three business segments visibly increase their contribution.”

Upstream production guidance was raised to 120,000-130,000 barrels of oil equivalent (boe) per day for 2020-2023, while the annual simplified free cash flow target was increased to USD 700 million, from over USD 500 mln.

“Downstream will continue to execute its strategic growth projects and deliver net efficiency gains by 2023, while increasingly focusing on decarbonization and sustainability,” MOL said.

The EBITDA target for MOLʼs consumer services business was raised to USD 600 mln by 2023, from over USD 500 mln, while the share of the non-fuel margin is expected to rise close to 35% in the same period.   

MOL also revised guidance for 2019 clean CCS EBITDA to USD 2.4 bln, up from USD 2.3 bln, on improved oil prices and downstream margins.

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