Yemisi Izuora/Agency Report
Nigeria focussed oil and gas firm Eland could be worth more than double its current share price of 48p, according to broker RFC Ambrian.
“Unusually for an oil and gas company, Eland is a growth stock,” analyst Stuart Amor said in a note.
Amor predicts Eland, which started the Opuama field within the OML 40 licence during February 2014, will see a threefold rise in production both next year and in the year after that.
Opuma, which currently yields about 2,750 boepd, could be flowing some 30,000 boepd by 2017 if everything goes according to plan, Amor added.
“Eland is about to grow its oil production substantially,” he said. “We believe that the equity market, which tends to look at oil companies as value stories, is not reflecting this growth appropriately.
“We forecast that Eland’s average net oil production rate will rise roughly threefold both next year and the year after (albeit from a low base).”
Ambrian has now begun its coverage of Eland with a ‘buy’ recommendation, and has set a price target of 116p per share.