Legger inn litt info fra sp1m om gazani og oppside potensialet her. Eco Atlantic har altså mest oppside i denne. Kan være verdt ett lodd?

Gazania among the most exciting exploration wells this year: The Block 2B partners in South Africa (Eco Atlantic, Africa Energy Panoro and Crown Energy) have indicated the well spud in late September. Block 2B is located in the Orange Basin where Total and Shell recently announced the large Venus and Graff oil and gas discoveries. In addition to these four companies. Africa Oil has an indirect interest in the well through its 20% shareholding in Africa Energy and 14% in Eco Atlantic. The well will be drilled by the Island Innovator rig and most likely spud in early October. The well will target a structure with close to 350 mmboe unrisked resource potential. On a pre-drill basis we have valued Gazania at USD 1.5/boe and risk factor of 20%, in line with our valuation methodology for frontier exploration. Admittedly, our assumed chance of success is on the conservative side compared to the guidance from the partners.


Spectacular upside potential in a discovery scenario: The Gazania well may be a company- maker for several of the partners, mainly due to the prospect’s size relative to the market caps of involved companies. In a discovery scenario, where we assume USD 4/boe NPV12 and 80% risk factor, we see a share price increase potential of more than 400% for Eco Atlantic, ~80% for Africa Energy, ~45% for Panoro, ~85% for Crown Energy and ~15% for Africa Oil. We stress that these estimates assume a discovery of 350 mmboe which is the pre-drill guidance. In the scenario of a discovery, we guess the market will not assign full value to all barrels until a potential discovery is appraised. While the discovery scenario shows spectacular upside for the partners, history shoes that share prices tend to be strong before and just after spud, not around the date for well results announcement. For example, for Africa Energy a clear share price pattern has been that the price has rallied ahead of commencement of drilling (Brulpadda and Luiperd), while the share price has weak after announcement of well results (even they have been positive).