www.ascentresources.co.uk
Ascent Resources plc is an independent, multi-project, European focussed oil and gas exploration and production company. Its portfolio is balanced providing access to low-risk development and revenue generating production projects, alongside exploration projects with the potential for higher returns. An experienced management team, implementing a defined development programme on primarily onshore projects, provides Ascent with a solid platform to grow and generate value for stakeholders. Licences are held in Hungary, Slovenia, Italy, Switzerland and The Netherlands.
November will be a busy month for London’s oil stocks, says finnCap
November will be a busy month for London’s exploration and production stocks, according to finnCap’s oil sector analyst Will Arnstein.
There will be results from eleven wells among the stocks finnCap covers alone, Arnstein said.
In a note today the analyst told clients that the sharp recovery in the equity market means that oil stocks aren’t as undervalued as they were. As a result “valuation opportunity” created by the summer sell off has now largely eroded away, he says.
On average there is now less than a 10 per cent gap between current prices and finnCap’s target prices, Arnstein explained.
The two exceptions to this pattern are European tight-gas firm Aurelian Oil & Gas (LON:AUL) and Asia focused Salamander Energy (LON:SMDR). Both of these stocks still display more than 50 per cent upside potential, Arnstein said.
According to Arnstein Europa Oil & Gas (LON:EOG) is another stock with the potential to rise significantly.
Among all the oil stocks covered by finnCap, Europa is the cheapest when compared with the group’s net asset value. But Arnstein believes that the Horodnic-1 well could change that. Europa began drilling the well in mid-October and it is expected to take around 30 days for the well to reach target depth.
"(Europa) expects to announce the results from a high impact well in November that could, in a success case, be the catalysts for a material re-rating,” Arnstein said.
The well is the second appraisal well on the Voitinel gas discovery. Horodnic-1 aims to prove up the minimum gas volume for a commercial development.
Europa’s well is one of five described as ‘high impact’ by Arnstein today. Included in the list are Cairn Energy’s final two wells in its arctic drilling campaign in the waters off Greenland.
Another high impact well result highlighted by Arnstein is Ascent Resources’ (LON:AST) Pg-10 well on the Petišovci Project in Slovenia. Ascent finished drilling the horizontal well in August and it expects to begin fracture stimulation work in the coming days.
Looking elsewhere Arnstein said that Sound Oil’s (LON:SOU) first exploration well in Italy will also be high impact.
The analyst said that among all the stocks he covers Sound Oil was the best performer in October.
The shares climbed around 50 per cent last month, rising from 2p to peak at 3.25p. According to Arnstein the market is now valuing the stock at 1.36 times the company’s net asset value.
Arnstein believes that a drilling success will be needed to maintain the group’s premium valuation.
Sound Oil announced yesterday that the drilling work is now underway on the Casa Tiberi-1 exploration well, on the Montemarciano permit in the Ancona area of Italy.
The well will be sunk to a depth of 700 metres and drilling is expected to last for 10 days. The well is designed to test the hydrocarbon potential of the Pliocene sands. The target is an estimated 6 billion cubic feet of gas.
