Although it is disappointing Jindivik-1 will not be completed as a producer, it once again has proved oil migration through the greater Mirage structure.
This result has not dampened our production target of ~300-400 bopd (net) by year end – which would give ITC an annualised net operating cash flow of >$6m.
We believe ITC has been oversold on the back of the result in what has been a net positive Mirage appraisal campaign. A perceived lack of newsflow heading in to the upcoming explration program in circa 8 weeks may also have unsettled investors.
A buying opportunity has presented in what we believe is a good quality junior oil company with high equity, organic growth potential. Our low case valuation based on only 2 mmbbls recoverable oil at Mirage is $0.08/sh – proving little downside.
ITC is set to commence a minimum 4 well exploration program (ITC 40%) in July/August in PEL’s 104/111 and 115 in the Cooper Basin. Most targets will be 1-2 mmbbls oil with upside potential. Each 1 mmbbl discovery t the JV would equate to ~2-3 cps to ITC.
ITC Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
