edison report

This at the start of the Edison Report today...

Valuation disconnect clearly evident
Despite recent gains, equity markets continue to excessively discount explorers
and in particular small caps with poor liquidity and little or no asset diversity. This
can be seen across multiple analyses including comparisons with DCF-risked
resource valuations, analyst consensus target prices and, probably most
significantly, industry terms determined from farm-outs.
Large price multiples on offer even on a risked basis
When considering net risked resource valuations we see substantial upside to
current share prices across the peer group, although not surprisingly there is wide
variability in our results. Pura Vida Energy and Tower Resources are probably the
standout names, with Pura Vida offering 20x upside (even on a risked basis) from
its Moroccan activities alone, while Tower is targeting an eye-watering 9.9bnboe
(gross) from a single well (Welwitschia-1).