Tangiers Petroleum is a prime example of one of the most obvious market mis-pricings that i can remember in a long time.
TPT has received "in principle" approval for their Tarfaya block offshore Morocco on the 18th March this year.
PVD announced last week that they had only just received theirs now.
I am a holder of both companies as i've stated before and i have two comments to make which i believe are significant and have major ramifications for both companies moving forward.
On one hand i am ecstatic that TPT management have achieved this "in principle" approval so long ago, because it clearly tells me that they can not be far away from formal approvals. It's been 4 months!! Once the wider market realises this we will see investors begin to take a position in this company in anticipation of the drill.
On the other hand, i am concerned that PVD has only just managed to achieve this "in principle" agreement now. They may be atleast 4 months away from formal approvals. In my opinion, this does not bode well for the company in the immediate future. The impact this may have on the cash situation, debt facility and funding of the new project is a cause for concern.
With regard to TPT however, the case for investment is becoming unbelievably compelling.
1) PVD market cap $70mill.... TPT market cap $27mill
2) Targeting the only proven play type offshore Morocco
3) 4 months ahead of PVD with regard to government approvals
4) Significant nearology play occurring in October with Cairn/Genel drill the very same structures we are targeting, right next door. This nearology does not apply to PVD as it is targeting deep water Miocene structures.
Surely the market has to wake up to this very very soon. In my experience, such significant market mis-pricing invariably gets re-rated.
This is an opportunity if ever i've seen one. I already have what i consider to be a large holding, however i am going to be increasing this significantly next week.
Management seem to be improving their marketing ability slowly... this is where the re-rating will come from.
TPT Price at posting:
21.0¢ Sentiment: Buy Disclosure: Held
