Genesis Energy Ltd

GNE: XNZE (NZL)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	NZD 2.80	Mdfdxw	Sbltvss

Genesis Energy: Trimming Fair Value on Disappointing Kupe Performance

Adrian Atkins

May 24, 2024

We reduce our fair value estimate for narrow-moat-rated Genesis Energy by 8% to NZD 2.50 per share after downgrading expectations for the 46%-owned Kupe oil and gas field. Work to improve flows at the new Kupe South-9 well has failed. Management said fiscal 2024 EBITDA will likely come in at NZD 410 million-NZD 415 million, about 4% below prior guidance. We lower our fiscal 2024 EBITDA forecast by 4% to NZD 411 million and our fiscal 2025 forecast by 10% to NZD 446 million. We expect the impact of the well failure on group earnings to diminish over time as Kupe depletes.

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