Wedoany.com Report-Nov 4,  Special Report: MST Access believes Finder Energy’s acquisition of the Kuda Tasi and Jahal fields offshore Timor-Leste is transformational and places it on the path towards becoming an oil producer by Q4 2027.

The low US$2m cost of entry, existing best estimate (2C) contingent resource of 22 million barrels (MMboe) of oil in the two fields that could deliver significant cash flows and the potential to serve as a hub for exploring and developing other discoveries and prospects nearby, all combine to add value to the company.

Using the discounted cash flow model for the Kuda Tasi and Jahal risked at 50%, MST Access has valued Finder Energy (ASX:FDR) at 39c per share, significantly higher than its current price of 5.5c.

“Secondary valuation measures for production companies, specifically EV/BOE (enterprise value/barrels of oil equivalent) provide context to the potential scale of re-rating that could occur once FDR is an established producer,” MST Access Senior Analyst Stuart Baker said.

The company had acquired the 76% stake in PSC 19-11, which includes other discoveries that take gross 2C resources up to 34MMboe, in August from Eni and Inpex.

Kuda Tasi and Jahal are discovered oil fields which are development ready and only require further geological work to de-risk the sub-surface reservoir models to inform well location and production expectations.

Krill and Squilla require more work and likely 3D seismic to improve the sub-surface understanding.

The latter two were located on dated 2D or very early 3D seismic and evaluated with wireline tools less sophisticated than what is available today and appear to have updip potential.

PSC 19-11 also hosts low-risk, near-field exploration potential for up to 116MMbbl of mean prospective resources.

Contingent resources are already proven to host hydrocarbons though still at a stage where their economic viability is unknown, while prospective resources require drilling to prove up the presence of oil (or gas).