Nostra Terra Oil and Gas Company PLC (AIM:NTOG, OTC:NTOGF) shares are tipped for more than 300% upside as it continues to deliver in its self-funded growth strategy, that’s the view of analysts at SP Angel.
The stockbroker has initiated its coverage of the AIM-quoted junior oil producer with a ‘Buy’ recommendation and a price target of 0.06p (versus today’s market price of 0.013p).
SP Angel analyst David Mirzai, in a note, highlighted the price target is based solely on the core net asset value (NAV) of Nostra Terra’s assets and the planned and upcoming Fouke-3 development well.
Nevertheless, Mirzai further anticipates Nostra Terra’s growth strategy can position the company to “opportunistically expand”.
The stockbroker believes successful delivery of Nostra Terra’s projects will restore perceptions of the firm as a growth company.
“In our view, the current market capitalisation is more than underpinned by the value of the existing production base (proved reserves), while further organic production growth can be supported by investment of the company’s operating cash flow,” the analyst said in a note.
“We expect delivery of production and cash flow growth this year will help to establish a track record for the management team and build credibility with the market, which should result in a re-rating of the share price towards our target price.”