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Fastnet Oil & Gas shares could be worth 96p this year, RFC Ambrian

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Fastnet Oil & Gas (LON:FAST) shares could be worth as much as 96p by the end of this year, broker RFC Ambrian predicts.

RFC Ambrian, in a sector note on African oil stocks, said the ‘fair value’ of Fastnet’s shares would currently be 20.7p – some 66% more than today’s market price of 12.38p.

And with high impact drilling due to get underway in the coming weeks, the broker suggests the risk-vs-reward favours the AIM quoted oil explorer, which it rates as ‘speculative buy’.

“In our ‘success’ scenario we estimate that Fastnet’s shares could be worth 96p by end-2014, while in our ‘failure’ scenario we estimate they could go down to 4p,” analyst Stuart Amor said.

Amor reckons the FA-1 (or Foum Assaka 1) well will be the main catalyst for the shares, though he also points out that third-party drilling offshore Morocco may also have a steer on the price as well.

A separate Moroccan project, onshore on the Tendrara Lakbir licence could also act as a catalyst, he explained.

The FA-1 well is expected to spud later this month. 

Fastnet has a 9.375% interest in the Kosmos operated drill programme which is targeting the Eagle prospect, with 360mln barrels of potential resources in its primary objective. The well will also target multiple secondary objectives which could provide additional upside in a success case.

The planned target depth is 4,000 metres, which is expected to take three months to reach. 

Fastnet is carried for past costs and the FA-1 well up to a gross well cost of US$100mln through a farm-out deal with South Korean group, SK Innovation.


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