logo-loader

VSA Capital Market Movers - Columbus Energy Resources

Published: 10:42 25 Sep 2019 BST

Columbus Energy Resources PLC - VSA Capital Market Movers - Columbus Energy Resources

Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (CERP LN) has confirmed that civil works and contracting are underway enabling the rig to be on site for the end of September ahead of the upcoming and potentially transformational drilling of the South West Peninsula (SWP) and we expect the well to be spudded shortly after the rig is on site.

The key factors which underpin the potential transformative growth arising from a successful Saffron well are the prospectivity of the SWP, contiguous to the prolific East Venezuelan Basin, and the attractive terms on which the company would produce due to the acreage being covered by Private Petroleum Licenses rather than IPSCs.

With regard to the prospectivity, this is the first of a number of attractive targets although CERP has announced today that EPI Group has upgraded its estimates Pmean STOIIP for the Lower Cruse from 66mmbbl to 77mmbbl therefore enhancing the recoverable volumes by 15% to 11.5mmbbls. This has a positive impact on the company’s internal economics for the project which on an unrisked NPV10 increase from cUS$79m to cUS$88m. Based on the updated presentation this appears to result from higher production rates from years 6-10 in particular.

Our previously published analysis based on the original 66mmbbl resulted in an unrisked NPV10 of US$83.8m for Saffron. We subsequently applied the Chance of Success of 45% determined by EPI Group resulting in a risked valuation of US$36.7m. Although the announcement clearly demonstrates the increasing confidence and potential of Saffron our risked valuation approach does minimise the volatility of such changes and therefore we conservatively maintain our current estimates. The major catalyst for realising the potential remains a successful well, however, and we highlight that on a per share basis of 3.4p/sh. our risked Saffron valuation continues to demonstrate that little of that risked valuation is currently priced in, despite the recent rally in the shares.

We reiterate our Buy recommendation and 21.6p target price.  

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

1 hour, 22 minutes ago