Perfect storm

One of the better IPO opportunities here for 2022. A company immediately drilling a highly prospective oil target in an exciting region, along strike from recent discoveries, in a sector with significant interest. The energy sector (XEJ) has been the best performing sector on the ASX for the last 12months, up 24% for the year.

Finder will be drilling the Kanga-1 prospect within 1 month of listing, with a target of 170million barrels of oil, net 25mil barrels to Finder (and predominantly free-carried for drilling costs by joint venture partners). A market cap on listing of 31.5mil, 15mil cash and a 16.5mil EV(157m SOI, 52% escrowed for 2 yrs). They hold a large acreage position on the NWS with several bites at the pie beyond Kanga-1. They have a whole portfolio in the North Sea too which adds another dimension to the business.

Some recent history, on the 23rd of March, Santos Limited (ASX: STO) and Carnarvon Energy (ASX: CVN) announced another material oil discovery at Pavo-1 in the Dorado trend. The Pavo-1 discovery shows that the Dorado trend is prolific, with 9 out of the last 10 wells drilled in the play encountering hydrocarbons. Importantly, the Pavo-1 results prove that the petroleum system is effective over a much greater area. This has big implications for Finder and their WA-547-P permit which has multiple large prospects identified in the same play. It should also be noted that Finder was the original permit holders of the 3 permits that comprise the Phoenix South, Roc, Dorado and Pavo hydrocarbon discoveries. They know the area well.

For a comparison Melbana Energy(MAY) has had recent success with their Alameda-1 well hitting oil. They now have a market cap of 420mil holding a 30% interest of the asset. This is a similar ownership structure and gives an idea about what the market cap of an oil explorer can do in the case of success.