Huntleys - Pre Spud Comments

Things are starting to warm up as Spudding day approaches...

Intro to the report as follows:
　
After a long wait PVD is about to drill a well offshore Morocco. The rig (Atwood Achiever) is on its last assignment before being handed over to Freeport McMoRan (Operator) to drill the MZ-1 well. At this stage the Company has guided for an April spud. Even in a softer oil price environment, the leverage that PVD has to a successful well is significant. Based on how the market valued the success of both FAR Ltd (FAR) and Carnarvon Petroleum (CVN) in 2014 we expect an uplift of close to 3x or the equivalent of $1.25/share.
If the MZ-1 well is not successful we think PVD’s downside valuation is 26cps. Importantly, unlike Tangiers Petroleum (formerly TPT) and Neon Energy (NEN) who both drilled unsuccessful wells, PVD has other assets, a second well in Morocco and cost protection on the MZ-1 well which all contribute to limit the downside on the stock. We maintain our Speculative Buy on the stock with pre-drill target price of 46cps.



Follow the link to access the report available on the PVD website.

http://www.puravidaenergy.com.au/ne...a_Vida_drilling_offshore_Morocco_in_April.pdf