Providence target price upped to 850p
Published 04/01/2012 | 05:00
PROVIDENCE Resources has had its target price increased by a third at a City investment bank after it bought out a partner's interest in an oilfield off the south east coast.
London firm Liberum Capital raised its target price for the stock by 200p to 850p yesterday, a week after Providence acquired San Leon's 30pc in the Barryroe discovery in the Celtic Sea.
In a note to clients, Liberum's Andrew Whittock said his firm believes Barryroe, and other discoveries Spanish Point and Dragon are "close to commerciality" but includes only Barryroe in its "base net asset value", along with the Singleton oil field in Sussex.
"Our 600p NAV is subject to both the current appraisal well confirming 50 million barrels of oil development and the terms of any farm down. It excludes other appraisal or exploration potential and is nearly three times the share price.
"The two best defined exploration prospects at Dalkey Island and Dunquin could each add more than 1000p to valuations if successful."
Providence closed down 0.76pc in Dublin at €2.45. In London, the stock ended yesterday up 1.22pc at 207p.