Cantor Fitzgerald has begun covering AIM oil explorer Fastnet (LON:FAST), with a ‘buy’ recommendation and a 28p price target.
Drilling in Morocco will be a catalyst for the share, the blue-chip broker believes.
“We see its licences both onshore and offshore Morocco as the key near term value drivers,” analyst Sam Wahab said in a note.
“With exploration upside potential at its interest in the Foum Assaka licence (well spudded 17/03/2014) underpinned by a lower risk appraisal asset in Tendrara-Lakbir, we believe the current share price trades at a considerable discount.”
Wahab says the market does not currently attribute value to a significant proportion of Fastnet’s asset portfolio, despite securing strategic partnerships with key industry players.
“This has served to significantly reduce the company’s financial exposure to exploration whilst maintaining a material working interest in its Moroccan licences.”
Cantor’s28p price target implies some 140% upside to the current share price of 11.5p.