Tale of the Tape: Shamaran (SNM) v. Africa Oil (AOI). Both stocks are owned by Lundins.

SNM (27% Atrush Block)

  1. Atrush-1 discovery well ready for production. Tested over 6,393 bopd with 120 meter net oil play.
  2. Atrush-2 discovery well. Tested over 42,213 bopd, 97 meter deeper than At-1.
  3. 30% upside reserves revision to a mean 600 mmboe & up to a high of 900 mmboe.. 
  4. Preparing to drill AT-3, AT-4 and AT-5.
  5. New operator TAQA paid $600 million for 53% of Atrush block.
  6. Commerciality has been declared.
  7. No debts with over $45 million cash.

AOI (50%)

  1. Ngamia-1 discovery well. Test results similar to Twiga-1 are to be expected. 143 meter of net oil play.
  2. Twiga-1 flowed 2,850 bopd with 30 meter of net oil play.
  3. PaiPai is a bust.
  4. Drilling Sabisa-1 in Ethiopia now.
  5. Declaration of commerciality in Kenya assets is still years away - long road to Tipperary.
  6. No debts with over $200 million cash.

Conclusions: SNM seems to be a better bet, currently sitting at $0.37. Scotia Capital has a buy target price of $0.80. The buzz on AOI appears to be gone. Both Twiga-1 and Ngamia-1 are not the 'monster' wells as predicted. AOI is still a good holding stock for long-term investors.