Tuesday, September 12, 2023
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Indo extended its Kruh Block contract five years with an increased after-tax split. Indo’s contract with Pertamina, the state-owned oil and gas company, now extends to September 2035. The amended contract increases Indo’s after-tax split to 35% from 15%. The extension, while not unexpected, comes after Indo had suspended drilling in the Kruh Block to complete a well workover. The favorable extension helps justify Indo taking its time in the Kruh Block as it completes a 3D seismic program to optimize drilling locations. We believe the government was willing to agree to the settlement as a way to spur Indo to increase drilling activity.
An operational update provides little new information. The company also updated investors regarding drilling plans in the Kruh Block and the Citarum Block. Management reiterated plans to drill 14 additional wells in the Kruh Block by the end of 2026 with the next well starting in 2024. Management did indicate that it expects to receive an environmental permit for seismic activity in the Citarum Block in 2023-4Q with work to begin in 2024-1Q. Our models assume one well drilled in the Citarum Block and two wells drilled in the Kruh Block in 2024.
Get the Full Report
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.