Canadian brokerage firm Canaccord Genuity maintained its SPECULATIVE BUY rating and C$1.65 target share price for exploration and production company Canacol Energy Ltd. (CNE:TSX). Canaccord perceives Canacol as being a strong candidate for an acquisition as a result of its significant, undeveloped land. The exploration and production company will soon begin exploration of Colombian lands likely to have significant oil stores, which could change the value of the company's stock.
Canaccord's target share price for Canacol is based on combining the exploration and production company's risked exploration upside and Canaccord's valuation of the Proven plus Probable (2P) reserves which is valued at C$1.31, and then adding a takeover premium.
The heavy oil exploration is scheduled to begin in three weeks. Canacol will start off by drilling three exploration wells, starting with the Tamarin-1 well. This exploration is two months behind schedule, but the drilling rig used will be full-sized, which will permit the Canacol to test any exploration discoveries for production.
Canacol Energy Ltd.'s stock opened at C$0.69 on September 28 and hit a 52-week high/low of C$1.87 and C$0.55, respectively.