Mayan Energy Limited Align Research Mayan Energy update note
22 November 2017 - 6:15PM
RNS Non-Regulatory
TIDMMYN
Mayan Energy Limited
22 November 2017
Mayan Energy - Update Note
New Conviction Buy stance. Revised near-term price target
2.1p
Following news on the 16(th) Nov 2017 of a GBP2m placing &
investment into SPV Deloro Energy LLC, in which a 49% interest is
being acquired from Petroteq in the Utah based Asphalt Ridge heavy
oil prospect, we revisit our valuation model for Mayan Energy.
Trading at less than 2 times our earnings estimates for FY18 the
stock remains dramatically undervalued.
Oil production expected to hit 500 bopd net by early summer
2018
Mayan is developing shallow low-risk projects with low levels of
capex and existing infrastructure in the mature oilfields of
Texas/Louisiana. Management plans to add 1,000 bopd annually with
the promise to shareholders of no shortage of high impact value
trigger events over the next few months.
New Asphalt Ridge project could add 400 bopd net within 30
months
The latest deal is a heavy oil play in Utah where oil sands are
mined and oil extracted by a patented advanced technology invented
by GBP40m market cap TSX-listed Petroteq Energy. In this deal,
Mayan/partners will gain access to this technology to roll out to
similar plays in Utah and worldwide.
Significant increase in reserves is on the cards
Mayan has fast improving fundamentals and significant inventory
of new wells & reserves, which should provide a significant
reserves upgrade which we anticipate will provide a material uplift
in the value of the company.
DCF analysis reveals an upside of almost 700%
Discounting the forecast cash flows (at a conservative rate)
from the workovers/new wells at the existing operations, as well as
the new Asphalt Ridge project allows us to confidently increase our
near term target price to 2.1p. We update coverage of Mayan Energy
& move to a Conviction Buy stance.
To read the full note visit
http://www.alignresearch.co.uk/cpt-company/mayan-energy/
This information is provided by RNS
The company news service from the London Stock Exchange
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