(4,05 PLN, 0,50%) and (30,6 PLN, 0,00%) signed a deal on cooperation in gas and oil exploration and extraction from both conventional and non-conventional sources and will analyse the exploration potential of seven licenses (five nonconventional and two conventional) owned by , the companies said. could become a shareholder in each of the licenses but has reserved the right to act as license operator on all licenses. Additionally, thanks to the agreement, will become one of PGNiG's five largest client as supply is planned to rise from 340mcm to over 500mcm annually.
Our view:
From a valuation point of view we see the news as neutral for both companies. Operationally, however, will certainly enjoy some knowhow transfer and may benefit from PGNiG’s project management skills. The positive for is clear: it will likely win a long-term client with potential for further sales volumes expansion.