Sound Energy PLC’s (LON:SOU) present share price presents “an attractive buying opportunity” according to broker Cantor Fitzgerald.
AIM-quoted Sound today updated on the Sidi Moktar project in Morocco, as well as its ongoing drilling in Italy, though the stock was recently moving lower and Cantor analyst Sam Wahab says this ‘retrenchment’ should be taken as an opportunity.
“We believe that Sound has sufficiently grown its acreage position to become a material player in Mediterranean gas.
“The company is benefitting from attractive and robust pricing fundamentals which have served to boost project economics.
“With a number of drilling catalysts in the short term, supported by a robust financial position, and a funded 2017/18 drilling campaign, we see Sound’s current share price as representing a compelling entry point for investors.”
With a 76p price target, Cantor’s ‘buy’ recommendation sees some 17% upside to the current price of around 65.6p.
Sidi Moktar programme kicks off
Sound on Monday told investors that work has now begun on a new programme at the Sidi Moktar project in Morocco, where it is re-entering the Koba-1 well.
The plan is to re-enter the well to perforate and test Lower Liassic reservoir, as well as possibly the Argovian, Sound explained.
It is anticipated to be a ten-day work programme, and it will be followed by a similar programme for Sidi Moktar’s Kamar-1 well.
The company highlighted that the Sidi Moktar area, which spans 2,700 square kilometres, is located close to infrastructure and gas demand, including a large scale phosphate plant which is owned by the Moroccan state.
Badile – Italy exploration
Sound Energy also noted that drilling operations for the Badile exploration well, near Milan in Italy, is now nearing the final stages.
The well has now reached a measured depth of 4,328 metres, and drilling is ongoing towards the targeted reservoir which is expected to be penetrated later this month.