We initiate coverage with a buy rating and a 35 cents target price, which is set at a discount to net asset value of 40 cents. SEH holds a 49 per cent interest in the Linxing and Sanjiaobei tight gas onshore in China’s Ordos Basin, where 2P (proven and probable) reserves have grown to 4 trillion cubic feet gross. We expect a substantial de-risking of these assets as SEH moves to pilot production and full field development over the next two years.
SEH Price at posting:
24.5¢ Sentiment: Hold Disclosure: Held
