Eco (Atlantic) Oil & Gas - Initiation of Coverage
Eco started trading on the TSX-V in 2011 with Namibian oil interests. 2016 saw the company teaming up with Tullow to acquire a licence in Guyana to explore similar basins in the margins on the other side of the Atlantic Ocean, ahead of becoming dual-listed in 2017. The shares began rising on Eco’s announcement to drill and climbed to 190p+ following the drilling of two discovery wells in Guyana which confirmed the prospectivity of the upper & lower Tertiary fairways. However, the stock price fell by two thirds in a matter of days following Tullow’s news that the wells contained heavy oil with high sulphur content, disappointing the market.
-
Prolific hydrocarbon provinces where Eco teams up with majors
The acreage in both Guyana and Namibia has huge potential where Eco has a good track record of being able to successfully negotiate farm out deals with majors to develop its projects. Eco is in good shape, with over US$17m in the bank, no debt and is fully funded for further drilling in Guyana.
-
Next door in Guyana, Exxon has discovered more than 9 billion boe
2021 could potentially see the drilling of two wells into light oil Cretaceous targets - the source of ExxonMobil’s success on the adjoining Stabroek Block where the 120,000 bopd Liza Field went into production in late 2019.
-
Strong acreage position in Namibia could benefit from drilling activity
Eco’s strategic positioning here could become increasingly more valuable shortly. Rising interest in this area could result in at least four wells being drilled by Total, ExxonMobil, Shell and M&P over the next 12 months.
-
Dramatically under-priced – our risked NPV suggest 448% upside
A big fall in the stock price provides a good buying opportunity. We initiate coverage of Eco with a target price of 123.54p and Conviction Buy stance.
Eco (Atlantic) Oil & Gas is an oil and gas exploration company focused on petroleum opportunities in Namibia. Through its wholly owned Namibian subsidiary, Eco Namibia, it holds five petroleum licenses issued by the Government of the Republic of Namibia. Eco Namibia holds three offshore license blocks covering more than 25,000 square kilometers (6,177,000 acres), in the Walvis Basin. Eco Namibia also holds two onshore license blocks covering 30,000 square kilometers (7,413,000 acres).
Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.