Sound Energy PLC (LON:SOU) faces a number of share price catalysts as it works to de-risk gas resources in Morocco, according to Capital Network.
Success at the Tendrara project, in Western Morocco, drove Sound Energy shares some 400% higher in the past year and provided the basis of a huge recent resource estimates (saying as much as 31 TCF of gas could be present).
The first of Sound Energy’s new potential catalysts, the results from the Tendrara-8 well, is just around the corner.
Drilling began on the Tendrara-8 well just over a week ago, the programme will last 40-50 days, and it is testing the large gas project some 12 kilometres further away from the other successful wells.
Other potential catalysts highlighted by Capital Network include possible partnerships for the Sidi Moktar project (potentially a Q1 event), re-testing of the existing TE-2 and TE-4 wells (H1 2017) as well as the Badile exploration well in Italy (H1 2017).
Work-over programmes are also planned for Sidi Moktar (also H1 2017).
“We believe the stock provides investors the opportunity to gain exposure to one of the few growth story in the sector, with the potential to benefit from substantial appreciation as assets get de-risked and material resources are added,” Capital Network analyst Lionel Therond said in a note.
“However, we would caution that any disappointing drilling results might leave the stock rather exposed given recent momentum and the lack of certified reserves, although we recognise that the optionality in the portfolio would remain substantial.”
For more research and analysis, see www.capitalnetwork.com.