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Roya Pandi Agree - APCL is worth watching. They need cash and...

  1. 471 Posts.
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    Roya Pandi

    Agree - APCL is worth watching. They need cash and are heavily relying on "neighbourhood" to lift value of their acreage.

    From recent Mirabaud (Jan 2017) note on APCL - apologies if already been posted.
    Link to report:http://www.africanpetroleum.com.au/investors/reports-and-presentations#rrp_analyst_coverage-block-0

    P2: The jewel in the crown: the success of Cairn Energy et al offshore Senegal has
    materially upgraded the prospectivity of APCL’s acreage position in Gambia and Senegal
    which comprises four contiguous blocks neighbouring Cairn’s SNE (473 mmbbls) and
    FAN oil finds (see Figure 3, below). Levering off this success, in August 2016, APCL
    announced a Letter of Intent (LOI) with a large international E&P company to farm-out
    part of Gambian blocks A1 and A4 (parallel talks continue with other parties over a farmdown
    in Senegal). Although the terms of the deal are yet to be formalised, we understand
    that APCL is seeking to divest around half of its interest (i.e 50% equity) on ground floor
    terms, thereby triggering the repayment of pro-rata back costs (~US$27m net to 50%).
    These would more than cover the cost of drilling an initial exploration well, likely on a SNE
    lookalike structure (such as Mahogany with 410 mmbbls of gross prospective resources).

    upload_2017-3-1_22-3-7.png

    2. P5:
    upload_2017-3-1_22-4-11.png
    Note: Cumulative The Ganbia + Senegal prospective target ~ 4.8 Bbbls!!!!

    Q: If FAR looking to increase exposure or % in region (- dont believe it is "IF" but more like "HOW can FAR increase":
    1. Upgrade resource and commerciality of current discovery
    2. Still awaiting details on Djiffere
    3. Leverage against SNE upgrade to buy into adjoining real estate. Of course, quality of bedfellows may require some quarantine.

    Good luck

    MS
 
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