Point Loma Resources Ltd (CVE:PLX) shares surged by more than 8% on Monday after brokers at Mackie reiterated their Buy recommendation on the stock and share price target of C$1.00.
Mackie also said that “Point Loma is highly undervalued trading at a large discount to its peer. We feel the market may not be fully valuing PLX’s development growth potential and we expect a re-rating of the stock as the company demonstrates rapid, sustainable production growth leading to better visibility and awareness by investors.”
The broker also highlighted that the company has amassed a large concentrated land base within the Mannville trend in West Central Alberta and established an inventory of over 400 potential horizontal well locations providing a significant development growth platform.
Mannville horizontal wells are highly economic even in a low oil price environment with Intermal Rate of Return of 50% to 70%. The company is also actively reviewing acquisition opportunities within its core areas that could materially increase production, reserves and drilling location inventory.
The broker note came in the wake of Point Loma releasing estimates of its reserves at 2,037 mboe.
Read: Point Loma estimates proved plus probable reserves at 2,037 mboe
Point Loma shares were already 1.8% up back then. But following the broker note the shares are up 8.8% at C$0.62 on Monday.
Elsewhere in the energy sector, Chevron Corp (NYSE:CVX) shares were up 1.8% at $112.10 after broker Jefferies named Chevron a "Franchise Pick," based on an analysis of the energy giant's cash flow and production growth profiles.