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Pura Vida
Sep 25th 2012
Pura Vida: Brokers raise price targets following
major new resource estimate
Brokers have rushed to increase their target price for Morocco-focused oil
explorer Pura Vida Energy (ASX:PVD) after a major upgrade to its resource
estimate last week.
Price:
A$0.7
Market Cap:
A$36.56M
1 Year Share Price Graph
On Friday, the firm said the offshore Mazagan permit now has total mean
prospective resources of 7 billion barrels, with 5.3 billion barrels net to the
company, with its 75 per cent interest.
This more than doubled the company's previous net estimate - of 2.4 billion
barrels.
What's more, the chance of success across the prospects reviewed have
increased to 34 per cent, from 19 per cent previously.
The release of the upgrade represents a huge boon to the firm, as it plans to
commence a formal farm-out process on the asset later this year to secure
funding for drilling - at a time when there is huge interest in oil exploration
offshore Morocco.
The upgrade was conducted
MacNaughton (D&M).
by
independent
group
DeGoyler
and
Share Information
Code:
PVD
Listing:
ASX
Energy
Sector:
Website: www.puravidaenergy.com.au
Company Synopsis:
It provides estimates for 13 prospects, including three new targets - Tafraoute,
Amtoudi East and Amtoudi West.
Combined these three add 2.1 billion barrels of oil equivalent to the total
resource and each have a 32 per cent chance of success.
Also, the firm's giant Toubkal prospect alone has been handed a mean
resource potential of 1.5 billion barrels and given a 31 per cent chance of
success.
House broker N +1 Brewin rates the stock a 'buy' and has increased its target
price to A$2.25 from A$0.87.
Pura Vida Energy has a 75 per cent interest
in the Mazagan Offshore Area. Mazagan is
located off the coast of Morocco in the
Atlantic. We have modern, high quality 3D
seismic data over the block with
independently certified potential resources
of more than a billion barrels of oil. The
Toubkal prospect alone has a potential
resource range of 180 million to 1.
[email protected]
"Following the farm-ins of Genel and Cairn to adjacent acreage, PVD will commence its farm out process at the start of
October. Given these deals and the entry of Total, Anadarko and Kosmos to Morocco we would expect significant
industry interest," said analyst Jack Allardyce.
Last week, Allardyce noted that the "read-across" values from farm-ins on adjacent acreage imply that Pura Vida could
justify a significantly higher valuation for its acreage than at present.
Broker Hartleys, which also rates the stock a 'buy' has increased its target price to 188 cents per share, from 113 cents
previously.
It reckons it is safe to assume that the company will achieve a farm-out, given factors, such as the quality of the
acreage and the size of the prospects, that will result in drilling within 18 months or possibly sooner.
Meanwhile, Foster stockbroking has initiated coverage with a 'speculative buy' rating and an initial target price of
A$1.50 a share.
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It says there are some significant high impact catalyts which should continue to drive the share price upward.
"These include results from a drop core program which will test for presence of hydrocarbons on the sea bed and the
commencement of a farm-out process, all of which are expected to occur by the fourth quarter of calendar year 2012," it
said.
Pura Vida shares were last trading up 4.29 per cent, at A$0.730.
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