Africa Oil Corp (AOIFF)

[douginil]

Thanks to Malcy's blog Sept 16, 2019

Eco (Atlantic) Oil & Gas

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Malcy comment for Eco (Atlantic) Oil & Gas:
Accordingly I think that 300p is comfortably achievable in the short term and I raise my long term target to 500p.
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Happiness is a thing called Joe and today the partners in Guyana have announced that the Joe-1 well is a discovery which has successfully opened a new Upper Tertiary oil play in the Orinduik Basin. Even Exxon have yet to find oil in the Upper Tertiary with its 11 Cretaceous and 1 Lower Tertiary discoveries nearby but any doubt about Hammerhead extending into the Tullow/Eco acreage is now extinguished. The well was drilled to a depth of 2,175m in water depth of 780m and evaluation of logging and sampling data confirms that Joe has encountered 14m of net oil pay in a high quality oil bearing sandstone reservoirs of the Upper Tertiary age.

As I said this is the first discovery in the Upper Tertiary and of course it de-risks the petroleum system in the west of the Orinduik Block where a ‘a significant number of Tertiary and Cretaceous age prospects have been identified’. Additional thinner sands above and below the main pay are being evaluated for possible incremental pay. These finds which make the partners 2/2 in this campaign are truly amazing and other adjacent areas are now surely going to be 75% COS success with so much upside to come.

These two discoveries add up to much more than a couple of finds on a frontier block and explain why Exxon has in its nearby discoveries gone into a fast-track development for Liza and its bigger neighbours. With drilling at nearby Carapa likely to now stimulate excitement even more the world is surely their lobster, indeed it could be that the partners decide to leave testing the Cretaceous until later and concentrate on the Tertiary in the meantime.

As for valuations and targets it looks like the original CPR is now already looking out of date and will have to be updated for this campaign. With the finds that they have just made and the whole area to be unitised with Exxon in the longer term I am ‘adjusting’ my targets. When I put Eco into the bucket list at 20p I had a TP of 200p and genuinely thought it could be a 10 bagger, now that is almost within touching distance those numbers need to be changed. Accordingly I think that 300p is comfortably achievable in the short term and I raise my long term target to 500p.


Read at:
https://www.malcysblog.com/2019/09/oil-price-savannah-petroleum-eco-atlantic-reabold-cluff-and-finally/