beaufort securities - speculative buy at 2.6c

Wildhorse Energy (LON:WHE)

Wildhorse Energy (WHE) signed binding heads of agreement to sell 100% stake in its underground coal gasification (UCG) assets to Linc Energy in lieu of A$4.04m worth of shares of the latter. This is intended to ensure progress of the UCG assets and availing of upside development potential to the shareholders. Linc would purchase either the UCG tenements & the associated geological and business records or into the particular subsidiaries of Wildhorse holding the tenements.
WHE would continue to hold interest in the Mecsek Hills Uranium Project in Hungary having JORC inferred resource of 48.3 million tonnes (Mt) at 0.072% U3O8 for 77 million pounds (Mlbs) of U3O8.

Our view:
Wildhorse seems to be further capitalising on the commercial potential of its UCG assets in Hungary through agreement with a new partner Linc Energy. Simultaneously, Linc's prior experience and expertise in UCG assets would aid the turnaround of the Mecsek Hills Project, now sold by the company. UCG offers multiple economic and environmental benefits, and Central and Eastern Europe are said to hold considerable potential of UCG reserves, thereby enhancing the commercial prospects for the two companies. With a strong near-term upside potential of Wildhorse, we reiterate a Speculative Buy rating on the stock.

Speculative Buy at 1.4p ~ 2.6c