Junior oiler Permex Petroleum Corp (CNSX:OIL) has had a 'buy' rating bestowed upon it by Fundamental Research.
It puts a target on the shares of C$1.46, which is a hefty distance from where they stand now at around C$0.44.
The company has not been standing still since completing its IPO (initial public offering) in May, raising over C$4mln gross, and has been on an acquisition spree since. It has no debt.
Permex’s current portfolio includes eight producing properties, mainly focused on light oil, including six in Texas, and two in New Mexico, Fundamental Research points out.
The firm has identified the potential for at least 59 new wells on the properties. The current gross daily production is 198 barrels of oil equivalent per day.
Fundamental says that if production remains flat at 122boepd (barrels of oil equivalent per day net) in 2018, it estimates that the firm can generate revenues of C$2.74 million, with a net loss of C$1.18mln.
It says its forecasts are very 'conservative' as Permex's management’s 2018 exit production estimate is for between 400 and 500boepd (gross).
For 2019, after the horizontal development of leases, it is between 3,000 and 4,000boepd (gross).
"We will adjust our forecasts as the company announces further details on its development plans," it adds.