Reabold Resources has received a punchy 1.2p share price target from house broker finnCap based on the potential of the first horizontal well at the West Newton gas discovery.
Scheduled for the second quarter of 2023, finnCap estimates this field alone has a risked value of 0.8p per share or more than four times the current share price.
West Newton, on licence PEDL 183, has already had three vertical wells drilled but horizontal drilling will confirm the flow potential of the reservoir, with a target of an initial gas rate of 36mmcf/d (5,900 boepd).
“Given the outlook for gas prices and the drive for domestic security of supply, there is a strong chance this project will proceed if commercial flow rates are delivered,” added finnCap.
In addition, in the UK North Sea, Reabold has built a material acreage position across four core areas that contain a deep inventory of exploration and appraisal opportunities, said the broker.
Drilling on these licences is some way off, but they still provide a project hopper to mature and monetise through farm-out and/or disposal.
Reabold also has interests outside the UK in Romania and California.
Shares eased 4% to 0.19p.