Afentra plc (AIM:AET, OTC:STGAF) shares are tipped to nearly double as the company lands an asset that comprises some of Angola’s largest oil and gas discoveries.
The company’s newly acquired asset, Block KON4, complements Afentra’s portfolio in the country.
It has landed a 35% interest in Block KON4, an onshore Kwanza basin, including the Quenguela Norte field, which was Angola’s largest onshore discovery, and is host to over 200 million barrels and previously saw peak production of 12,000 bopd.
Altogether, the block covers eleven past producing oil and two gas fields that historically yielded 90 million barrels of oil production.
“Afentra continues to leverage its unique position in Angola, this time building exposure to the underexplored onshore Kwanza basin,” Stifel analyst
Repeating a ‘buy’ recommendation, which comes with a 106p target (current price 54p), added: “we do not yet include any value for the onshore Kwanza licenses, but see both low-cost development and/or exploration activities as routes for future value creation.”
Elsewhere, Cavendish also has a ‘buy’ rating for Afentra, with an 88.8p target, and Shore Capital’s fair value estimate sees the company worth 101p per share.
“Despite a proven hydrocarbon system, the basin has been under-explored relative to other onshore West African basins where multi-billion barrels of oil have been discovered,” Shore Capital analyst James Hosie said.
“KON4 adds further exploration potential alongside the opportunity for earlier production.”
Cavendish analyst James Midgley commented: “it adds near-term activity to help maintain newsflow and shareholder engagement.
“We will include value for the onshore permits in our NAV once Afentra can confirm a work programme.”