ProActive Investors UK
Fastnet Oil & Gas
www.fastnetoilandgas.com
by Philip Whiterow
Shore adds that recent independent reports covering the Molly Malone and Mizzen Basins in the Celtic Sea also indicate significant volumetric potential.
Fastnet Oil & Gas’s (LON:FSN) combination of high impact exploration acreage offshore Morocco and in the Celtic Sea is worth almost double the current share price, suggests Shore Capital.
Morocco is attracting considerable investor interest adds the broker and Fastnet has entered the exploration ‘hot spot’ in partnership with a first class operator (Kosmos) and with the benefit of a lucrative carry.
Its core project in Morocco is Foum Assaka, which is located offshore (in water depths of 300m to 2,100m) in the highly prospective Agadir Basin.
The company has an 18.75% working interest (25% paying interest) and is being carried by Kosmos through an initial exploration phase costing circa US$16m (gross).
“Drilling is expected to commence in late 2013 and Fastnet retains lots of flexibility to farm down further. Fastnet also has an option over an interest in the Merada onshore gas project, which provides near-term drilling potential.”
Shore adds that recent independent reports covering the Molly Malone and Mizzen Basins in the Celtic Sea also indicate significant volumetric potential.
Fastnet is expected to bring in a major partner following completion of its initial phase of seismic reprocessing. Its Celtic Sea acreage is also close to Providence Resource’s (LON:PVR) breakthrough discovery at Barryroe.
Shore adds the company is now actively evaluating opportunities to add a ‘third leg’ to the portfolio, most likely another project in Africa, although without any new developments it beleives Fastnet a high-impact E&P story which is rapidly gaining critical mass.
On a risked basis, Shore estimates the Morocco assets are worth 25p per sahre, and the Celtic Sea 8p.
With the cash on the balance sheet,the whole company is worth 34p against current marekt price of 18p Shore suggests.
Potential share price catalysts in the coming months include the selection of drilling targets by Kosmos and completion of a farm-out deal in the Celtic Sea.
Shares were up 2% today to 18.03p.
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