The primary focus for the company now is to close out an advanced, multi-asset farm-out
process. At the forefront of these talks are its Côte d’Ivoire and Gambia/Senegal assets
which have attracted a flurry of industry interest (due to proximal oil discoveries in 2014
by Total in Côte d’Ivoire and Cairn in Senegal – see Figure 1, above) and are poised for
drilling to start in late 2015-16. Despite a subdued farm-out market, we remain confident
that APCL will secure exploration funding on attractive terms (2 for 1, or better), providing
industry endorsement and line of sight on a near-term, high impact multi-well programme.
Moreover, in contrast to many small-caps, APCL has retained operatorship and control of
all its licences through the seismic acquisition phase, providing the flexibility to sell down without undue dilution to drilling. With an unrisked NAV of 47x the current share price, we
believe that the equity market is materially undervaluing the potential of the portfolio.
Accordingly, we reiterate our BUY recommendation with a NOK 0.88/shr price target.
AOQ Price at posting:
0.1¢ Sentiment: Buy Disclosure: Held
