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Fair wind behind Hurricane
UK oil and gas play Hurricane Energy (HUR:AIM) looks to maintain its current upwards momentum raising more than £70m through a placing and accompanying open offer (20 Oct) to drill two new exploration wells on its Lincoln and Warwick prospects.
Drilling is expected to commence in November.
The fundraising is another demonstration of investor faith in the stock after a premium-priced £52.1m placing in April.
These funds were used to drill an appraisal on its Lancaster discovery and in September (9 Sep) the highly encouraging results of this well helped boost the shares.
Hurricane is targeting fractured basement reservoirs, a largely untapped source of hydrocarbons in the UK which has been exploited in Yemen, Libya and Vietnam.
FinnCap analyst Dougie Youngson reiterates his ‘buy’ recommendation and ups his price target from 66p to 72p.
At 40p we continue to see upside potential. Farm-out discussions are another potential catalyst before the end of the year, with Hurricane negotiating from a position of strength.