7.5c valuation on first well. - 7 bagger

Not bad for first well. It de-risks the secondary plays with 4 big targets on the first lease alone.
This is also a quick drill time of approx 4 weeks.

PCL (Pancontinental Oil, +5.0% to 1.05cps, m.cap A$53m, Oil & Gas): Aiden Bradley

• Hartleys have published an updated note on PCL.
• Namibia is fast regaining its pre-2014 reputation as an emerging industry exploration hot spot.
• In the latest news, ExxonMobil has announced another deal offshore Namibia, acquiring a 30% interest in PEL 44, which is on trend to the south of PCL’s PEL 37 block.
• Chariot Oil & Gas have also confirmed they have secured the Ocean Rig Poseidon to drill Prospect S in PEL 71 (again on the same trend just below PEL 44) straight after PCL’s Cormorant-1 well.
• The Cormorant-1 well (PCL 20% and free carried (uncapped)) is due to spud in mid-September and will take about 4 weeks to complete.
• Cormorant itself is only one of four large Submarine multiple Cretaceous-aged fans with anomalously soft amplitudes identified by 3D in PEL 37.
• In the event of success at Cormorant-1 in line with pre-drill expectations a PCL valuation close to $400m (circa 7.5cps on the current issued share capital) could be achieved, given the de-risking of follow up targets.
• In the event of a failure we do not view this as game over for Namibia or PEL 37. News flow from other operators or progress at PEL 87 could still provide some support to the share price; however, in the event of failure (and before any further news from Namibia) we would expect the stock price to retrace towards 3.5c per share.
• We set our near term (pre-result) target price at 1.25c per share (up from 0.7c per share based on recent CVN performance as a benchmark) therefore at current levels we rate PCL a Speculative Buy.