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clock Created with Sketch. 13/08/18
12:20
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Originally posted by jamieparklondon
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Herewith some thoughts from this week's issue of the Oil & Gas Weekly Galilee Energy was up from $0.615 to $0.68 also on extraordinary volume for a small junior explorer. The shares traded at a new 12 months high of $0.705 on Friday.Canaccord Genuity initiated coverage of Galilee Energy with a spec buy rating of $0.76 target price with an unrisked valuation of $2.20 per share. The Canaccord analyst like the Patersons’ analyst before him added that “Applying historic 2P transaction multiples (which are becoming increasingly relevant) to a 500 Pj booking yields $925 million or $4.80 per share.” Well maybe!Canaccord said should the company successfully convert its 2,508P of 2C Contingent Resource into reserves and subsequently supply gas to “the desperately short East Coast gas market” the result will be transformational for the company. (The OGW is not sure “desperately short” is accurate.)Galilee Energy proving up and producing gas and more on the sale of the asset to a larger entity.Senex’s Atlas project comes to mind. They are new.Galilee Energy remains for us a high-risk momentum play supported by questionably accurate broker reports and chat room hype. That said the play may not be done yet. Who knows, given the current speculative enthusiasm for the stock, just how the market will react to the first gas that emerges from the pilot once the massive amounts of water currently being produced gives way to gas in early September."
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Interesting article, definitely something to consider, but I'm still confident that this will be a $3+ share. I think Cannacord and Patersons are on the money and with the big boys (Credit Suisse and a couple of others the names of which escape me right now) right on board, I still see this as a LT play that will pay off big time.
(20min delay)
