Post by
Proselenes on Dec 08, 2020 10:07am
ShoreCap target price up to 200 pence a share for TXP
Comment from Shore Capital.
'Risked NAV estimate upgraded to 200p
On 3rd December, Touchstone released yet another exceptional drilling update, this time in relation to its Cascadura Deep-1 exploration well, where significant hydrocarbon accumulations have been encountered. This result came sooner than we anticipated, with Touchstone having decided to suspend drilling at ~8,300ft, due to high gas pressures. Cascadura Deep-1 is Touchstone’s fourth Ortoire well and continues the company’s 100% drilling success rate.
Whilst there are a number of subsurface considerations here, including correlations with earlier discoveries, in simple terms Cascadura Deep-1 is the best well drilled by Touchstone to date, having encountered multiple stacked thrust sheets across a substantial sand thickness. Therefore, even ahead of production testing scheduled for early FY2021, we now expect a reserves impact far greater than we had previously anticipated, with this latest discovery also underpinning plans for a multi-well development (and expanded exploration) drilling programme.
We said in our commentary when the news came out that, ahead of fully revisiting our sum-of-the-parts valuation, a Risked NAV estimate of ~175p/share was looking more than appropriate, and we now take this early assessment up to exactly 200p/share – reflecting the significant value that Touchstone has added to its flagship Ortoire asset since drilling commenced last year.'
Comment by
Davidblackgreen on Dec 08, 2020 2:50pm
Probably only 50% of what they actually think so plenty of downside protection.