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Valeura Energy has 'tremendous' upside potential from its deep gas play, says Mackie

This resource estimate is substantially higher than the broker's preliminary resource estimate of 1.0 tcf
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Last year, the Yamalik-1 well was drilled to a total depth of 4,196 metres

Broker Mackie is upbeat on Turkey focused oiler Valeura Energy (CVE:VLE), which it rates as a 'speculative buy'.

A recent resource report for the company's unconventional natural gas and condensate resource in the Thrace Basin showed a net unrisked mean prospective resource of 10 tcf (trillion cubic feet) of natural gas with 236 million bbls (barrels) of condensate, said the broker.

The consultants assigned a high chance of commerciality of 51.1% resulting in a net risked mean prospective resource of 5.2 tcf and 165 million bbl of condensate.

This resource estimate is substantially higher than the broker's preliminary resource estimate of 1.0 tcf, it noted.

The results from the Yamalik-1 well sunk last July and data from seven deep legacy wells and other wells were included in the report.

Data from Yamalik-1  showed a 1,300 metre column of natural gas and condensate in overpressured reservoirs below 2,900 metres.

The broker says Valeura has tremendous upside potential from its deep gas play and we are increasing its target price to C$9.00 (from $3.00) equivalent to a  one times' multiple of its new risked NAV (net asset value) of $8.99 per fully diluted (fd) share.

Shares in the firm are today at C$6.60 - up 9.09%.

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