Jacka gets a neighbourly glowTuesday, 23 October 2012AFRICAN...

Jacka gets a neighbourly glow
Tuesday, 23 October 2012

AFRICAN explorer Jacka Resources has been rated a “speculative buy” by Patersons Securities on the back of some encouraging news from neighbouring acreage in Somaliland.
Jacka’s African portfolio includes shares in offshore assets in Tunisia and Nigeria and onshore permits in Tanzania and Somaliland.

Patersons sees particular upside in Somaliland, where Jacka owns 50% of a 22,000sq.km area known as the Odewayne block.

UK company Genel Energy, which is led by former BP chief executive officer Tony Hayward, recently farmed in to acreage adjacent to Jacka’s.

Patersons says Genel has 1.8 billion pounds in cash and is aggressively buying into prospective acreage in the Middle East and north Africa.

Genel has claimed prospective resources of more than 1 billion barrels at its Somaliland asset and has mapped out a work program that will include an exploration well in 2014.

Patersons also noted Ophir Energy, another Africa-focused, UK-based company, had recently farmed into the region.

“Whilst still early days in the region, the entry of Genel and Ophir are clearly an early endorsement of this frontier acreage that JKA secured in Somaliland as an early entrant in April 2012,” Patersons said.

The analyst said it had not included the Somaliland acreage in its valuation of Jacka “so it represents significant upside”.

Patersons also attached no value to Jacka’s early-stage venture in Tanzania, where the explorer hopes to farm down some of the 100%-owned asset.

About half of Patersons’ valuation – 18c per share risked – came from Jacka’s 5% share of the Aje oil and gas field offshore Nigeria, where first oil is targeted for mid-2013.

In Tunisia, Jacka and its partners have secured a rig and expect to drill the Hammamet West-3 well in January next year. Patersons values Jacka’s 15% interest at 10c per share unrisked.

Jacka also has 15% of WA-399P offshore northwest Western Australia, where operator Apache is reviewing 3D seismic of the Gazelle prospect.

Patersons said its valuation for Jacka’s interest in WA-399P was 4c per share risked and up to 19c per share unrisked.

On the funding front, Patersons said Jacka would need cash to fund its share of the Hammamet West-3 well.

It said fund raising options included the sale of Jacka’s stake in WA-399P and farm-downs in Africa.

Patersons reiterated its speculative buy rating on Jacka with a price target of 35c per share.

Patersons was joint lead manager on Jacka’s $14.2 million equity raising in February 2012.

Jacka shares were at 19c yesterday.