Prime Markets has labelled Africa-focused oil and gas group Afren as a 'buy', saying that the business has a 'very bright future' if Monday's trading update is anything to go by.
The company reported that net production averaged a record 42,830 barrels of oil equivalents per day in 2012, in line with guidance.
Meanwhile, it said that it would report record sales revenues of $1.5bn for last year, up 151% year-on-year.
Head of Dealing Richard Curr said: "A 151% increase in sales revenue is a jaw dropping number by any standards, and as this comes from a company that is well run and well regarded in the City, one can almost here the analysts sharpening pencils for the almost inevitable raft of upgrades.
"The icing on the cake for Prime Markets is the incredibly bullish technical picture, with triple support lines all within a few pence of each other, which suggests a very firm floor in the stock at current levels, and more than enough to launch a retest of 150p year highs and beyond."
The very low valuations of this excellent company is bemusing...Surely by now the sp should reflect it's worth and potential...2.20 atleast..Yet it is stuck in the doldrums around 1.38 and struggling to break through. Afren is ripe for a take over and it's days as an independent company are limited, much to the delight of the shareholders..Strong BUY!
What are we missing with this stock? TLW has a valuation of 4 x earnings and market cap of 2.5 x asset base; GKP is 250 x earnings (only £7m last year) and valuation is 3 x asset base. Yet Affers is practically 1:1 from a valuation x earnings and valuation x asset base. To have a market cap of £1.5bn when your projected revenue is 151% up at £1.5bn (highly profitable and without exceptionals) is a joke. Management may have to do what Tullow did and start returning some of the profits to investors if the market will not recognise its true position. I foresee some dividends soon if the sp does not show progress in the near term. The Algerian situation did not help last week - however, AFR operates in relatively stable areas - so struggling to understand why stock will not push on....DYOR
Hit my target of $1500m without Barda, Blackrock selling their stake, will not dampen the enthusiasm for AFR, they recently sold out of my GDL but their timing poor, suggesting to me that they need Cash, punters are pulling out of their underperforming Funds. Can't blame 'em!!! I look forwad to seeing the result of Okwok 10, with OML 115 to come next no doubt, been waiting a long time for these babies, these may be marginal fields, big margins!!! DYOR
Nomura has upgraded its rating for oil and gas group Ophir Energy by two notches, from 'reduce' to 'buy', saying that highly-geared exploration and appraisal (E&A) drilling in 2013 could be a 'company maker'.
The broker said that Ophir has a leading exposure to pure exploration. "In a 'blue-sky' success scenario, 2013 drilling could be worth $17bn or c.500% of the current share price, the highest in our coverage universe."
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