Africa Oil Corp (TSX:AOI) has earned a repeat ‘Buy’ rating from analysts at Stifel following the release of its fourth quarter financial and performance results.
The analysts highlighted that Africa Oil’s results were within guidance and slightly ahead of their estimates, with the consolidation of Prime imminent.
“Africa Oil's ability to deliver to guidance over a number of years now is really testament to the quality and predictability of its asset base,” they wrote.
“Those assets have delivered impressive deleveraging results but post the upcoming consolidation the narrative is going to evolve to one of leading shareholder returns and excess cash flow that can be allocated towards new accretive opportunities.”
The analysts valued Africa Oil at C$3.20 per share based on its Net Asset Value assuming the price of oil will average $70 per barrel in the long term.
Shares of Africa Oil traded hands at C$1.90 on Friday morning.
“We are unlikely to make significant changes on the back of these results although note the imminent step-up in cash flows post completion of the Prime reorganisation,” they wrote.
“In our view, this name is going to be increasingly difficult for investors to ignore, particularly given its unique exposure to high impact drilling programmes in places like Namibia.”