finnCap Research Company Notes - 18 December 2019

Dec 18, 2019 / News

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Sector: Energy

Independent Oil & Gas (IOG) : Corp

Harvey well results analysis


Key data                              

Share price (p)                  16.4

Target price (p)                60.0

Market cap (£m)                              78.6

Enterprise value (£m)                    57.6


Following updated well mapping, management estimates the Harvey field contains just 40 bcf of gas, below the low end of the pre-drill resource range. This size accumulation should still be commercial, although whether CalEnergy will take up its 50% farm-in option is unclear. Offsetting this, the neighbouring Redwell discovery is larger than previously thought at ~100 bcf. This opens up the potential for a Harvey-Redwell area development, although further technical evaluation is required and IOG has agreed to extend the CalEnergy farm-in option to 27 February 2020. Until we have greater clarity, we are leaving our 60/sh risked-NAV and price target unchanged.


Jonathan Wright

020 7220 0543


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