Africa Oil Corp (AOIFF)

[douginil]

Thanks to a post by gimo211 on another board

Dundee Capital Markets re Cheptuket-1 16 Mar 2016

Broker spotlight: Africa Oil "find" is well-received. Will a find become a discovery?

It is a significant oil show, but not yet a discovery, is how Africa Oil's (TSE: AOI) Cheptuket-1 well find was described by Dundee Capital Markets on Wednesday.

With strong oil shows confirming not only the presence of an active petroleum system but also significant oil generation potential in tandem, Cheptuket-1 (Block 12A, AOI WI: 20%) marks the first successful 'wildcat' well to date outside of the South Lokichar Basin, Dundee began its survey.

"However, it should be noted that, without a material sample of moveable oil recovered to surface, Cheptuket-1 cannot yet be described as a discovery.

Further appraisal will thus be required to confirm Cheptuket as an oil discovery - logs and oil samples confirming the presence and scale of net pay," Dundee analysts added.

The next key catalyst will be the revised CPR, expected in April.

"We expect a sharp uplift from the current gross 2C resource base of 616 mmbbls – beyond 700 mmbbls by our estimates – potentially releasing further 'carry' funding from Maersk", the broker said.

Still, investors took it well on a day when oil prices rose sharply. Africa Oil shares were up 8.9% at C$2.08.