Afentra plc has acquired a 35% interest in Block KON4 in Angola, a move that analysts predict could nearly double its shares. The asset includes key oil and gas fields in the Kwanza Basin, offering substantial production potential. Investment firms are optimistic, offering ‘buy’ ratings with increasing target prices for the company.
Afentra plc has caught the market’s attention with its recent acquisition of a significant asset in Angola, which could nearly double its shares, currently priced at 54p. Their latest endeavor involves acquiring a 35% interest in Block KON4 in the Kwanza Basin, which hosts key oil and gas reserves, including the once-thriving Quenguela Norte field, known for producing over 200 million barrels of oil and peaking at 12,000 barrels per day.
The Kwanza basin holds considerable promise, comprising eleven previously productive oil fields and two gas fields that have historically yielded around 90 million barrels in oil production. According to Stifel analyst insights, Afentra’s strategic position continues to strengthen with this addition, emphasizing that it enhances their exposure to an underexplored section of Angola’s oil landscape.
Stifel has maintained a ‘buy’ recommendation, setting a target price of 106p. The analysts consider both low-cost development projects and exploration activities as potential avenues for generating future value, even though they haven’t factored in the new licenses yet. Similarly, Cavendish also holds a ‘buy’ stance with a target of 88.8p. Shore Capital, on the other hand, values the company at approximately 101p per share, indicating optimism about its growth.
Shore Capital analyst James Hosie underlined that while the Kwanza basin’s hydrocarbon system proves to be robust, this area has lagged in exploration compared to other West African regions, which have reported multi-billion barrel discoveries. Afentra’s KON4 acquisition not only unlocks exploration possibilities but also presents a chance for production to be ramped up in the near term.
Cavendish analyst James Midgley highlighted that this move brings timely activity, boosting newsflow and keeping shareholder interest alive. He added that there will be an adjustment to their net asset value (NAV) to reflect the onshore permits once a work program is confirmed by Afentra.
Afentra plc’s acquisition of Block KON4 in Angola marks a significant step in the company’s growth strategy. With this 35% interest in a promising oil field and the overall potential of the Kwanza basin, analysts expect increased share value and production opportunities. Recommending ‘buy’ ratings from multiple investment firms suggests a positive outlook for future development and shareholder engagement.
Original Source: www.proactiveinvestors.co.uk
