Independent Oil & Gas (IOG) : Corp

Harvey well results analysis

Key data

  • Share price (p) 16.4
  • Target price (p) 60.0
  • Market cap (£m) 78.6
  • Enterprise value (£m) 57.6

Following updated well mapping, management estimates the Harvey field contains just 40 bcf of gas, below the low end of the pre-drill resource range. This size accumulation should still be commercial, although whether CalEnergy will take up its 50% farm-in option is unclear. Offsetting this, the neighbouring Redwell discovery is larger than previously thought at ~100 bcf. This opens up the potential for a Harvey-Redwell area development, although further technical evaluation is required and IOG has agreed to extend the CalEnergy farm-in option to 27 February 2020. Until we have greater clarity, we are leaving our 60/sh risked-NAV and price target unchanged.

Jonathan Wright 020 7220 0543

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