The broker set a valuation of 37p for the share and that is said to already take into account risks associated with an upcoming appraisal programme.
In a note it highlighted that the £2.3mln raised alongside this month’s new listing means the company now has sufficient funds to advance its CBM assets in Oregon and future work programmes could lead to commerciality.
“Given Oregon’s differentiated gas market price and supportive regulatory environment, the barriers to commerciality are lower than would otherwise be expected,” the broker said in a note.
He added: “In advance of its appraisal programme, the company has applied for, received and installed the intra-field flow lines on 5 wells, and now only now requires the installation of gas compression facilities, a short pipeline connection to the grid and water disposal to commence the appraisal programme, and monetise gas produced from the existing and planned wells.”
SP Angel’s net asset valuation of US$32.5mln or 37p per share, whereas an un-risked version of the valuation sees the stock worth US$61mln or 70p.