Africa Oil Corp (AOIFF)

[garyadam]

Translation of Swedbank convinced the upside in Africa Oil

Swedbank convinced the upside in Africa Oil

In a company update compared the company's CEO Keith Hill their area with the North Sea. The size is about the same but the number of wells drilled in Kenya is only a fraction of those that have been drilled in the North Sea. 34 wells have been drilled in Kenya and about 2400 in the North Sea.

This writes Swedbank in a day's fresh analysis.

The company has so far only locked up a basin (Lokichar) in northern Kenya. Additional pools will be tested during the next 18 months. In the short term, the company wants to acquire partners for further exploration of the area, but in the long term would still sell the company / company deposits. CEO Keith Hill mentioned that negotiations with potential buyers will begin when the company is valued at least $ 4 billion, which represents approximately 90 per share, the Bank continues

The triggers that Swedbank considers most important in the short term, the related reserve update as the bank expects sometime in September. This reserve update, if the outcome falls well mean a short-term potential of 15-20 crowns shares because the risk of the company is reduced. Although new wells are considered good triggers.

The target price is set to SEK 80 and the recommendation is strong buy.