The presence of turbite reservoir sands at Pancontinental Energy's (ASX:PCL) petroleum exploration license (PEL) 87 in Nambia, mitigates the reservoir risks to a considerable degree and increases the possibility of a farm-in deal with Woodside Energy Group (ASX:WDS) according to a Tuesday note by Euroz Hartleys.
On Jan. 31, the company said that recent studies showed the presence of turbite reservoir sands within the Saturn complex at the permit, and the company is now focused on two exploration opportunities within the complex that cover a combined area of up to 1,385 square kilometers.
Euroz believes that the size and scale of this opportunity will convince WDS to potentially exercise their option for a farm-in deal at the license by May.
The leads are also optimally located to receive hydrocarbon charge from the Kudu Shale kitchen, Euroz noted.
The complex's shallow water depth, lower gas risk, and promising reservoir qualities suggest favorable economics for commercial development if exploration is successful, Euroz added.
Additional drilling success in nearby permits could also boost the oil and gas firm's share price.
Euroz Hartleys maintained Pancontinental Energy's speculative buy rating and price target of AU$0.04.
Shares of Woodside Petroleum rose nearly 2% in recent Wednesday trade.
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