After several years of oil crisis, the market is now about to turn and companies are once again turning their attention to investment in exploration assets. Among companies with ownership in such attractive assets, there are a few diamonds, companies where the market still not fully understand the huge opportunity that the oil crisis has presented. One of them is African Petroleum Corporation Limited, Oslo-listed at ticker APCL!
The company has substantial equity interests in Ivory Coast, Senegal and The Gambia.
Other companies working in these countries include Anadarko, Total, Eni, Ophir Energy, Kosmos, BP, Woodside, Cairn Energy and .... APCL, with a MCAP of $ 50 million.
APCL is in the spotlight as the market now has recovered and improved for the better with ownership in licenses neighbouring historic discoveries made by well known companies such as Total (Saphir) in Cote d`Ivoire, Cairn/Woodside/FAR (SNE/FAN) in Senegal and Kosmos (Tortue) in Senegal/Mauritiania.
Cairn Energy had great success in Senegal in 2014 when they made the biggest oil discovery throughout the year, and this discovery was on a neighbouring license of African Petroleum!
In May the company has a firm plan to drill the Ayame West prospect in Cote d`Ivoire together with their equal partner Ophir Energy (Operator), targeting 350 million barrels of oil.
Later on, when the letter of intent (LOI) in The Gambia is potentially completed into a farm-out agreement, the Company will plan and commence drilling hopefully in Q4-17 or Q1-18 targetting 400 million barrels in the Gambia, at the Mahogany prospect.
Risked NPV at Ayame West in Ivory Coast is $ 70 million and unrisked NPV is $ 562 million.
In The Gambia, the numbers are even higher.
Risked NPV of Mahogany is $ 139 million and unrisked NPV at $ 836 million.
Overall, this provides us the following calculations:
Risked NPV of $ 70 million + $ 139 million = $ 209 million, equivalent to about $ 1.7 per share (about 15 NOK per share, 375% up)
Unrisked NPV of $ 562 million + $ 836 million = $ 1.398 billion, equivalent to about $ 11.9 per share (about 105, - NOK per share, up + 2600%)
Today, the stock is currently priced around 4 NOK, and this is just the analysis of two (out of a total of 8) licenses with a bull target at 100 NOK!
Besides, all comparable companies in the area have seen their share prices rise substantially prior to drilling.
The company has a highly competent Executive Director & CEO with considerable experience from BP and Africa.
Executive Director & CEO - at African Petroleum Corporation Limited
Oct 2015 - Present - 1 year and 6 months
COO African Petroleum Corporation Ltd.
2012 - 2015 - 3 years
VP Exploration, North Africa - BP
2007 - 2012 - 5 years
Algeria Exploration Director - BP
2005 - 2007 - 2 years
President BP Sakhalin - BP
2003 - 2005 - 2 years
Imperial College London
BSc, Geology and Oceanography
The company once had a market cap of 20 billion NOK!
Now many will argue that it was too high, and offcourse it was in a different market, but then you could argue that $ 50 million is far too little today.
Here is a unique chance to get in on the ground level in the cycle and be part of the company's upturn, driven by both the licenses and the market as a whole.
Yes, there are risks, but there are also a really transformational upside, not least because of confirmed oil on neighbouring licenses.
This might turn out to be the perfect time to invest in this company!