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Solo Oil at 0.33p - house broker ups target to 0.9p from 0.8p in detailed note

By ShareProphets | Monday 12 June 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

House broker Shore Cap has upped its share price target for Solo Oil (SOLO) from 0.8p to 0.9p in a detailed note (below) entitled “Adding helium to the mix”. Following the successful testing of Ntorya-2 and subsequent resource upgrade, and the acquisition of a 10% holding in the appropriately titled Helium One, it has increased its sum-of-the-parts valuation for Solo.

The Ntorya-2 result has increased discovery size and de-risked additional prospectivity, while Shore says it believes that the Helium One interest represents a highly accretive and complementary acquisition. Like Aminex+ (operator of Kiliwani North and Ruvuma), Solo’s shares have retrenched from previous highs due, according to Shore, to perceived “issues” which it discusses in this note. It argues that these are not materially detrimental, and the broker says

"We now see an attractive entry point in anticipation of further drilling, development licence award and finalisation of early production plans at the successfully de-risked Ntorya discovery. In addition, our updated sum-of-the parts valuation now incorporates the considerable potential inherent in Helium One’s Rukwa project; our Risked NAV estimate is upgraded to 0.9p/share (from 0.8p/share previously).

You can read the full note HERE

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