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PVR - Low hanging fruit?

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PVR - Low hanging fruit?


Postby JonnyT » January 13th, 2017, 10:56 am

Prior to the XMAS break I took a position at PVR around 12p and have since added to it a few times.

I happen to think that this is one that comes around every 5 to 10 years that is low hanging fruit with minimal downside risk but plenty of potential upside.

As I write the shares are trading at 17.3p giving a market cap around 100m.

What you get for this is:
Circa 300m barrels recoverable at Barryroe pending appraisal
Circa 100m MMBOE at Spanish Point pending appraisal
A 13TCF gas case, 9BBOE oil case prospect Newgrange
Plenty of other interesting Irish Licenses

But the most important bit is a drill on Druid this June targetting 3 billion STOIP and the potential to deepen the well to another target with 2 billion STOIP. Druid. PVR have 80% of this and have collaborated with Schlumberger. The net result is that the COS of Druid has been put at 41%

My view is that I think 30p to 40p is likely prior to Druid results with no other events. If they can farmout Barryroe/Spanish Point or Newgrange then 100p isn't impossible PRIOR to Druid results.

Now if Druid comes in or a farmout occurs then the well will likely be deepened to the Dromberg prospect AND a second optional well slot used to perhaps drill Newgrange.

So in summary I think there is very good upside on no news and multi-bag potential if some of the pieces come together. This is my number 1 pick for 2017 and like I've said these opportunities in my opinion aren't common.

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