Heads up – Ophir looking very cheap

Currently 77.5p a share, Ophir is undoubtedly one of the few stocks left out there that has not yet made a meaningful move higher in 2016. Part of thesharehub top ten, Ophir has languished below 80p for the majority of the year. Meanwhile, progress has been made by peers as the PoO recovery continues from lows seen in early 2016.

Ophir’s business has not remained static. In fact, the last update on production in September was 11000bopd and expected to increase as more workovers complete. Add to this, the company announced the start up of the long awaited Kerendan field. Whilst not oil related, the gas prices of late have increased slightly and are expected to rise further in the coming months.

And finally, after the disappointment in early 2016 on Fortuna farm out deal falling through, the company announced in early November a new agreed deal which will see just $150mil capex spend by Ophir (not until 2018/19) on what is expected to be a $2billion capex project.

And finally finally… (yes there is more) SHELL announced the spud of a new well in Tanzania exploring further gas resources to add to the already sizable reserve tally to date. Ophir owns 20% of the licences after selling 20% a few years back to Pavillion for $1.2bln.

Ophir market cap currently…  £545mil with a healthy cash balance of near £150mil net of debt.

Undervalued by a country mile. The market will catch up eventually but for now, this one looks forgotten.

Sharehub price target set at 110p for 2016.