Broker WH Ireland upgraded its valuation of Canada-focused oil and gas company i3 Energy PLC while providing positive comments on recent developments.
"We perceive the company is bulking up for that significant growth opportunity for which scale, and commensurate financial strength, are the name of the game," said WH Ireland.
Earlier today, i3 announced its capital budget and production guidance for 2024, earmarking US$50.9 million to spend drilling 15 wells across its operations in Canada.
“We see the company’s 2024 drilling efforts culminating in strong production growth into winter 2024/2025, just in time to capture the robust natural gas prices expected for that period,” said analysts.
WH Ireland expects gas prices to increase “significantly” in the mid-term now that the futures market for North American natural gas “has found its floor”.
For these reasons, the broker has lifted its i3 price target by 5p to 21.2p, reflecting “our positive appreciation of i3 Energy’s judicious strategy, combined with the inherent benefits of significantly rising natural gas prices in North America”.
Shares were trading at 11.08p on Thursday afternoon.