A switch from HDR to ROC is now the way to go based on valuation.
HDR 60% premium to current NPV, or 5% discount to expected upside value post 2H drilling program with at least one new wildcat success (Tevet).
ROC 14% discount to current NPV, or 56% discount to expected upside value. Primary reason for discount is the recent rights issue surpressing price (ie. maybe some funds selling and banking profits ahead of the FY close).
ROC only has 176m shares on issue v HDR 644. Thus equivalent exposure of ROC is similar to having a 13.5% interest in Mauritania v HDR 21.6%.
Mauritania August drilling program: 2 Rigs approx 20 wells, 3 to 4 Tio appraisal, Banda appraisal and up to 5 wildcats - appraisal.
The action is sure to hot up soon and ROC looks like a good leveraged play on a successful Mauritanian program.
ROC Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
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