Afentra plc has acquired a 35% stake in Block KON4 in Angola, known for major oil discoveries, likely leading to a doubling of its share price. Analysts express optimism about the block’s potential, with multiple buy ratings and varied target prices. The acquisition strengthens Afentra’s position in the underexplored Kwanza basin and suggests pathways for future growth and production.
Afentra plc, listed on AIM as AET and OTC as STGAF, has just acquired a significant asset that could potentially double its share value. This acquisition involves Block KON4 in Angola, which is home to some of the country’s largest oil and gas discoveries, including the Quenguela Norte field, Angola’s largest onshore find that has over 200 million barrels and previously reached peak production levels of 12,000 barrels of oil per day.
Block KON4 spans eleven former oil-producing fields and two gas fields, historically generating about 90 million barrels of oil production. Analysts believe this deal strengthens Afentra’s foothold in Angola, further enhancing its portfolio in the Kwanza basin, which remains relatively underexplored compared to other West African regions.
Stifel analyst highlights Afentra’s strategic positioning in the region, emphasizing its potential for low-cost development and exploration activities, which could significantly create future value. They have maintained a ‘buy’ recommendation for the company’s shares, setting a target price of 106p, while the shares currently sit around 54p.
Other analysts express similar optimism. Cavendish has also issued a ‘buy’ rating, pegging the target price at 88.8p. Meanwhile, Shore Capital estimates Afentra’s worth per share at approximately 101p. Shore Capital’s James Hosie remarked that, although the Kwanza basin has a proven hydrocarbon system, it remains less explored than other West African basins where substantial oil reserves are located.
The acquisition of KON4 not only adds exploration potential but also opens the door to earlier production capabilities. Cavendish analyst James Midgley noted that this deal brings near-term activity, which, in turn, helps sustain newsflow and keeps shareholders engaged. “We will include value for the onshore permits in our NAV once Afentra can confirm a work programme,” he stated, highlighting the importance of subsequent operational plans.
In summary, Afentra plc’s acquisition of Block KON4 appears to be a strategic move that is likely to propel the company’s growth in Angola’s oil and gas sector. Analysts are bullish on Afentra’s prospects, indicating significant upside potential due to the asset’s rich resource base. The consensus is clear: with ongoing development and exploration efforts, Afentra is poised to create additional value for its shareholders in the coming months.
Original Source: www.proactiveinvestors.co.uk
