Sintana Energy tipped as a high-upside opportunity

It comes aft the institution secured a 12-month hold to its licence (PEL 87) offshore Namibia, a determination the broker said keeps live a perchance value-unlocking farm-out process.

The broker said the extension, granted aft an exertion to the ministry, gives the Pancontinental-led concern much clip to marketplace the Orange Basin plus and bring successful a spouse to money exploration drilling. Cavendish noted that “a fig of groups” are continuing to beforehand method owed diligence, with drilling of an exploration good inactive anticipated aboriginal this year.

At the existent 26.5p stock price, Cavendish’s unchanged people implies 134% upside.

Sintana has an indirect 7.35% involvement successful PEL 87 done its involvement successful InterOil/Custos and is expected to beryllium carried done the exploration well.

Cavendish described the licence arsenic a credible opportunity, pointing to modern 3D seismic sum crossed 6,593km² and estimated gross recoverable 2U prospective resources of much than 2 cardinal barrels. The largest prospect, Oryx, is estimated astatine 1.09 cardinal barrels, portion Hyrax is pegged astatine 733 cardinal barrels.

Cavendish attributes 1.2p per stock of its 62.1p sum-of-the-parts valuation to PEL 87 connected a risked basis, against an unrisked worth of 44p per stock for Sintana’s interest. The broker applies Pancontinental’s geological accidental of occurrence to the project, alongside a further commercialized hazard origin tied to securing a farm-in partner. It said the licence hold gives the radical much clip to advancement that process, which could materially amended the project’s hazard profile.