"UBS Global Research upgraded Galp Energia (ELI:GALP) to “buy” from "neutral" rating and raised its 12-month price target to €20 from €15, citing the potential of the Mopane oil discovery offshore Namibia to significantly increase the company’s value, in a note dated Monday. Galp shares have dropped about 30% from their 2024 highs, mainly due to doubts about its Namibian assets. UBS analysts now see the Mopane discovery as a commercial opportunity capable of driving a near doubling of Galp’s share price within five years.
Galp holds an 80% stake in the Mopane block, where estimated resources exceed 10 billion barrels of oil equivalent. The company is in the process of securing a partner to take on a 40% stake and operatorship. UBS values Galp’s post-farm-out interest in the field at approximately €6 per share, including €5.3 per share from a projected capital expenditure carry and €0.6 from its remaining field stake. According to UBS, the market currently prices at only €0–1 per share of value for the Namibian asset. A farm-out agreement, expected by the fourth quarter, is viewed as a significant near-term catalyst."
PCL Price at posting:
1.1¢ Sentiment: Buy Disclosure: Held
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