From Mirabaud brokers this morning on BOR’s Early Darwin EAST Well results. I think they are getting slightly ahead of themselves with the 450p upgrade – but agree that if the exploration continues to go well in the southern region, then prices near that level will be very likely indeed.
A long way to go yet in this Fi southern story. It’s only just begun.
Mirabaud brokers - Target price upgrade to 450p a share.
Borders & Southern – Darwinian revolution….Mirabaud
Today Borders & Southern Petroleum announced a basin-opening gas-condensate discovery at the Darwin East exploration well – the first ever deep water well in the South Falkland Basin (SFB). Borders’ 61/17-1 well encountered 68m of net hydrocarbon pay in a good quality (up to 30% porosity), shallow marine reservoir which corresponds directly to the area of high amplitude identified on 3D seismic data pre drill. Although the exact liquids content of the discovery remains unclear at this stage, the structure covers some 26 sq km and our back-of-the-envelope calculation suggests the field could contain c.480 mmboe of recoverable condensate and gas. Furthermore, looking forward there are numerous lookalike prospects across Border’s acreage with similar structural and seismic attributes that have been materially de-risked as a result, and we would point to the success of explorers offshore East Africa as an example of how a string of remote gas discoveries can lead to the creation of very substantial value utilising a cluster LNG approach. Overall, we view the results of Darwin East as a promising start to the current SFB drilling campaign and maintain our BUY recommendation on an upgraded target price of 450p/shr – offering some 266% upside to Friday’s close.