Pareto on Africa Energy: Strong cash position & More share price triggers ahead

I copy Pareto comment on AEC results in full below. The comment was released on Thursday after the Q2 results:

Strong cash position & More share price triggers ahead

Africa Energy reports Q2 results with low operating costs and farm-out proceeds leading to an unchanged cash position of USD 14m (slightly ahead of expectations).

The company is encouraged by operator TotalEnergies’ progress on the planed fast-track development at Block 11B/12B with no changes to previous comments (link). In our view, this is positive as it potentially implies news on gas offtake agreements and development economics later this year that would be significant share price triggers.

On Block 2B, Africa Energy expects to commence drilling of the >300 mill bbl potential Gazania- 1 prospect later this year. The costs are carried by incoming partners and we estimate a value potential of SEK 2.5-3.0/share net in case of success.

Despite higher commodity prices, the share price has suffered from lack of news flow. We think this will change ahead and recommend buying ahead of the herd. TP SEK 4.50 to remain unchanged

Full investment thesis:

https://seekingalpha.com/article/4444974-africa-energy-backed-by-total-asset-sale-behind-the-corner-to-triple-your-capital