Wildhorse Energy (WHE.L, 1.88p) – Speculative BuyYesterday,...

Wildhorse Energy (WHE.L, 1.88p) – Speculative Buy

Yesterday, Wildhorse Energy announced that the Hungarian Parliament approved the modification of the mining law, which now includes underground coal gasification (UCG) specific regulations setting out a legal framework for the development of UCG projects in Hungary. These regulations have since been put into legal force as of 1st January 2014. The company is currently undergoing discussions with a third party for partnering in these projects. The stock climbed 15.4% in yesterday’s trade.

Beaufort Securities view:

The inclusion of UCG within the existing Hungarian mining law as a mining method is likely to benefit Wildhorse’s UCG projects in Hungary. The UCG technology offers multiple economic and environmental benefits and the current update would facilitate Wildhorse in availing them. The prominent coal reserves in Hungary add further prospectivity to the project. Securing of a strategy partner would play a crucial role in the company’s further progress on the UCG projects.

We feel that the company possesses a strong near-term upside potential and thus, reiterate a Speculative Buy on the stock.