From Euroz Hartleys:Pancontinental Energy NL (PCL.ASX) We think...

From Euroz Hartleys:

Pancontinental Energy NL (PCL.ASX)
We think there is fantastic upside in one junior Oil exploration company in “the most exciting oil + gas basin on the planet”
SP: $0.01
Mcap: ~$80m
SOI: 8bln
550m PCLO 1c Aug 2025 options
Cash: ~$6m**$1m as at 31 March 23 with an additional $5m raised @1c on the 15th May 2023
Option deed with woodside to enter deep-water Namibia Pel 87 exploration projectPel 87 geographically situated next Shell, Totalenergies, Chevron and Galp which are all at exploration / early drilling stage.

Investment thesis:
Woodside funded US$35m (AUD $50m) for 3D seismic survey – serious capital investment
Woodside’s seismic survey was 6,600 km2 (exceeding PCL’s original plans by 1,600km2) – shows more commitment to project
Excellent quality oil source, reservoir and sealing rocks proven within the basin, as evidenced by the major recent oil discoveries in area
TotalEnergies’ Venus oil discovery reportedly holds at least 3 billion barrels.

Upcoming Catalysts:
‘Fast tracked’ processed seismic results expected to become available for interpretation by late August 2023 – stock should trade up leading into this with confirmation of targets and size being a major a catalyst for market.
Note the Saturn turbidite structures footprint looks to exceed Venus’s footprint by at least 3x the size and overlie the same high-quality mature Oil Source Rock.
Woodside have until year end to elect to exercise the option to acquire participating interest in PEL 87 – We are hoping to see confirmation around securing a rig and timing of well next year in conjunction with this option exercise.

Peer comparison: MAY (Melbana Energy)
Mkt cap: $300m
SOI: 3.37b
2 billion barrels
Alameda target currently being drilled in Block 9 (30% participating interest) in Cuba
Melbana has doubled in the past 3 months to Market Cap of $300m in the lead up to the drilling of this high impact Alameda well.

Conclusion:
Woodside’s invested interest shows their commitment and we believe they will most likely exercise option of interest in PEL 87 following seismic results and confirmation of targets in PEL87TotalEnergie’s 3b+ oil barrel discovery in the orange basin highlights the exciting prospectivity of the location
Confirmation of large target prospects in the billions of barrels shows upside potential at the current Mkt cap (compare to peer MAY whose Mcap is $300m with a 2b barrel target being drilled)
We see excellent upside at current 1c price.
Given the high success rate (100% / 4 from 4 successful wells – Venus, Graff, Jonker) in this new frontier basin and the large targets that exist on PCL tenure, there is potential for a 2-3x movement in the lead up to drilling.
Looking comparatively at Melbana, the stock has doubled in the past 3 months alone in the lead up to spudding of the Alameda well.