Meren Energy (MER.TO) remains an interesting name for investors looking at offshore oil and gas, according to the latest research note from Arctic Securities. In its 26 February 2026 equity update, Arctic kept a Buy recommendation on the stock and lifted its target price to SEK 17 from SEK 16, implying upside from the SEK 14 share price used in the note. The report was written by research analyst Daniel Stenslet.
The tone of the update is constructive, even though Arctic trimmed some near term forecasts after a softer than expected fourth quarter. Stenslet described Meren as having a “Resilient core portfolio with meaningful organic upside”, which neatly captures the broker’s overall view of the business. He also wrote, “We continue to view Meren as an attractive way to gain exposure to a low-risk, cash-generative deepwater portfolio.”
That positive stance matters because the report does not ignore the weaker points. Arctic said Q4 2025 EBITDAX came in at USD 73 million, below its USD 105 million estimate, mainly because of higher operating costs and inventory effects. Net income was USD -90.8 million, driven by a USD 105.3 million non-cash impairment linked to the Agbami cash generating unit. Even so, cash flow and balance sheet metrics were more reassuring, with net interest bearing debt ending the year at USD 155 million, better than Arctic had expected, while year end NIBD to EBITDAX was just 0.4x.
Arctic responded by lowering its 2026 production assumption to 26.7 kboepd, from 28.5 kboepd, which fed through to a roughly 13% cut to 2026 estimated EBITDA. Still, the broker’s central argument is that Meren’s broader investment case remains intact. The report points to a portfolio that continues to generate cash, while also offering multiple development and exploration options that could add value over time.
A major part of that story is Nigeria. Management told the market that drilling activity across the Nigerian hubs should restart after an unusually long pause, with two rigs expected to return towards late 2026, timing dependent. At Agbami, the programme includes appraisal of the adjacent Ikija discovery as well as infill drilling. At Akpo and Egina, Arctic highlighted the Akpo Far East exploration prospect, which it said could potentially be tied back in less than two years in a success case. Later in the decade, projects such as Preowei and Egina South could also help support production.
Namibia is another important piece of the puzzle. Arctic said the Venus development remains on track towards a mid-2026 targeted FID by the operator. That improves visibility on a project with the potential to support material growth from 2030 onwards, without creating a near term funding burden for Meren. Arctic also reduced the project risk factor applied to Venus in its valuation, which helped offset some of the impact from lower short term operating assumptions.
Valuation is where Arctic sees room for upside. On a USD 70 per barrel Brent price deck, the broker said its year end 2026 core NAV is about SEK 17 per share, which forms the basis of the price target. On Arctic’s own higher oil price assumptions, core NAV rises to SEK 22 per share. The broker also noted that it assigns no value to 2C resources in Nigeria or exploration upside, suggesting there may still be additional optionality beyond the published target price.
Key highlights from the latest update
- Buy rating maintained
- Target price raised to SEK 17 from SEK 16
- Q4 2025 EBITDAX of USD 73 million
- Net income of USD -90.8 million, reflecting a non-cash impairment
- Net interest bearing debt of USD 155 million
- NIBD to EBITDAX of 0.4x
- 2026 production guidance of 23 to 28 kboepd
- Arctic now assumes 26.7 kboepd for 2026
- 2026 estimated EBITDA cut by about 13%
- Venus Namibia FID targeted for mid-2026
- 2025 revenue of USD 559.9 million and 2025 EBITDA of USD 311.0 million
- Forecast 2026 dividend yield of 9.7% in Arctic’s model
Final Thoughts
The latest research note from Arctic Securities suggests Meren Energy still has a credible long term case, despite a softer quarterly update. The short term numbers were not perfect, and Arctic has reset some forecasts to reflect that. Even so, the broker continues to see a business with a solid balance sheet, cash generation, and a series of operational catalysts in Nigeria, Namibia and Equatorial Guinea. For investors who want exposure to offshore production with room for organic growth, Meren Energy appears to remain firmly on Arctic’s radar.
