A City broker has repeated its bullish valuation of Canadian Overseas Petroleum (LON:COPL, CVE:COPL) in the wake of an update from the explorer.
Shore Capital estimates the risked net asset value for COPL to be 21p – more than double the current share price.
It was reassured by the company’s update earlier Friday in which it confirmed a potentially game-changing well off the coast of Liberia will start drilling by the end of the year.
Mesurado-1 is being sunk by the giant Exxon, which is majority owner of Block LB-13, with Canadian Overseas holding a fully-carried 17%.
“[It] is a high-impact well and, given the strong subsurface understanding and presence of a lucrative multi-well carry, we believe that the risks lie firmly on the upside for COPL,” Shore said in a note to clients.
The company’s quarterly update showed the company was sitting on $3.7mln of cash.
COPL is not just about Liberia. It teamed up with a local company called Shoreline to acquire control of licence in the Niger Delta that provides it access to near-term production.