Meren Raises Earnings Forecast to $440 Million and Cuts 2026 Capital Spending
Key Facts
Meren Energy raised its 2026 earnings before interest, taxes, depreciation and amortization forecast to a range of $390 million to $440 million, from $270 million to $360 million, and lifted its operating cash flow estimate to $250 million to $280 million, from $185 million to $255 million. The company announced the revision in its third-quarter results statement issued via Nasdaq Stockholm on November 10. It said the midpoints of the new earnings and cash flow ranges exceed the upper ends of the midpoints of the previous forecasts. The higher estimates came alongside a cut to the capital investment range, with spending projected at $70 million to $90 million in 2026, compared with a previous range of $100 million to $140 million. The company attributed the lower spending to the timing of drilling campaigns, with some activity deferred to 2027.
Meren posted earnings before interest, taxes, depreciation and amortization of $112.8 million in the third quarter and $332.3 million in the first nine months of 2026. Operating cash flow before working capital was $73.6 million in the quarter and $213 million from the start of the year through the end of September. The nine-month results put earnings achieved at a level close to the previous annual range's upper limit of $360 million, while the new range is higher. The company kept its updated annual production ranges at 25,000 to 27,000 barrels of oil equivalent per day on a working interest basis and 29,000 to 31,000 barrels per day on an entitlement basis. In the first nine months, average production was 26,900 barrels of oil equivalent per day on a working interest basis and 29,800 barrels on an entitlement basis, and the company said it was on track within the updated ranges.
On distributions, Meren announced a fourth quarterly distribution for 2026 of $25.1 million, equivalent to $0.0371 per share. This brought total distributions announced for the year to $100.3 million, according to the company statement. The distribution will be paid to shareholders of record at close of business on November 19, 2026. At the end of the third quarter, net debt was $185.2 million, down $27.1 million during the quarter. The company recorded free cash flow of $59.1 million in the period, while total liquidity was $327.9 million at the end of September.
On production and operations, Meren said its producing assets performed in line with expectations during the third quarter, and output from the Akpo and Egina fields exceeded plan by September. Losses on commodity risk management contracts were $35.3 million in the quarter, including $13.1 million in realized losses. The company also sold two cargoes during the quarter, with a combined volume of about two million barrels, at an average realized price of $92.4 per barrel. The company compared this with an average dated Brent price of $86.9 per barrel during July and August, when the cargoes were loaded. At quarter-end, net debt to earnings before interest, taxes, depreciation and amortization was 0.5 times, below the company's internal target of 1.0 times through the cycle.
The company is set to continue its deepwater drilling program in Nigeria, saying the rig had arrived at Akpo for a multi-well program at Akpo and Egina. It said drilling was scheduled to begin in November 2026 with the Akpo Far East exploration well. The second rig assigned to the Agbami and Ikija program is expected to arrive in the first quarter of 2027. This coincides with the expected deferral of some drilling activity to 2027, which the company linked to the timing of drilling campaigns when it lowered its capital spending estimates. Management also scheduled a conference call to discuss third-quarter results on November 11, 2026, at 09:00 U.S. Eastern time, 14:00 GMT and 15:00 Central European time.