KUALA LUMPUR: Hong Leong Investment Bank Research says Sona Petroleum is fairly valued at 79 sen per share upon completion of Salamander’s Thai asset buy.
Hong Leong noted it has not captured exploration cost and potential reserves addition from G4/50 exploration block.
“The acquisition is NPV accretive and we estimate the company to trade at attractive.
“Upcoming approval from SC and shareholders will help to narrow the discount to fair value with immediate catalyst of 2P reserves upgrades in 4Q14.
“As comparison, Hibiscus share price has increased by 156 per cent since the date of announcement of QA acquisition until shareholder approval.”
Sona acquired a 40 per cent stake in Salamander’s Thai assets, B8/38 (production / development) and G4/50 (exploration concession) for US$281.2 million
(US$251.2m for B8/38 and US$30m for G4/50). The acquisition is expected to be completed in 4Q of 2014 conditional upon approval from SC, Sona and Salamander’s shareholders.