Mosman Oil and Gas Ltd (LON:MSMN) is a ‘buy’ and could more than double in value, that’s according to an initiation note by stockbroker SP Angel.
The small-cap oiler bucked the trend of its peers in 2020 with a year of operational development, highlighted analyst Sam Wahab.
“Against a challenging market backdrop, the company successfully transitioned into a low cost, high margin producer, exiting the year with a transformed production profile,” Wahab said in a note.
READ: Mosman says Falcon well can double production
“Recent positive news flow has seen Mosman’s share price rally over 30% YTD alone, however we believe there remains considerable running room in the stock for investors.”
SP Angel sets a price target of 0.42p, versus a current price of around 0.19p.
Wahab noted that Mosman is planning an aggressive drilling programme in 2021, pitching for one well per quarter.
Significantly, he points out that Mosman is fully funded for its upcoming drilling commitments following recent asset sales and the maturing of short dated warrants.
“In our view, Mosman’s shares offer investors an attractive entry point into a growing producer in an established, mature region underpinned by compelling project economics,” Wahab added.
“First commercial sales from the Falcon-1 well have served to transform the company’s production profile and therefore liquidity position against the backdrop of a commodity price recovery.”