The current share price offers a “compelling entry point” for prospective investors in Sound Energy PLC (LON:SOU), which has enjoyed further drill success in Morocco.
That at least is the opinion of Cantor Fiztgerald analyst Sam Wahab, who repeated his ‘buy’ and 101p a share price target for the stock.
“Sound has grown its acreage position to become a material player in Mediterranean gas,” he said.
It owns two gas properties in the Morocco – Tendrara and Sidi Moktar – as well as assets in Italy, including Badile, which is being prepared for drilling.
Earlier, the company said flow rates from its second well on Tendrara had exceeded expectations, mirroring the success of the first.
Its partnership with the oil services giant Schlumberger means it has the expertise and financial firepower to expand at a rate other juniors don’t.
“The company is benefitting from attractive and robust pricing fundamentals which have served to boost project economics,” Wahab added.
“The transformational flow rates achieved at Tendrara, in addition to Schlumberger’s collaboration at Badile, Sound is bucking the trend of its AIM listed E&P counterparts in our view.”
“With a number of event-driven catalysts on the horizon, supported by a robust financial position, and funded 2016/17 drilling campaign, we see Sound’s current share price as representing a compelling entry point for investors.”
At 11.50am, shares in the company were changing hands for 83p for a rise of 5% on the day. In the year to date they have advanced 375% on the back of drilling success at Tendrara.