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ShoreCap stays at 'buy' on Savannah Petroleum, sees 'much higher' share price

Fri 18 October 2019 12:56 | A A A

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(Sharecast News) - Analysts at ShoreCap reiterated their 'buy' recommendation for shares of Savannah Petroleum, telling clients that the unsecured loan facility into which it had entered on the same day was "entirely consistent with our expectations" and that they continued to anticipate a "much higher share price" on the acquisition of assets from Seven Energy was completed.

In a research note sent to clients, analyst Craig Howie stood buy his 80.0p per share fair value estimate, reiterating his expectation that he expected "solid" earnings and cash flow to ramp-up over his forecast period.

Regarding the loan facility for up to $10.0m, Howie explained that it was meant to provide liquidity before the planned completion of the Seven deal, which he believed would occur "significantly" before its maturity date and result in a "significant" $74.0m cash inflow.

"We continue to expect final completion of the transformational Seven deal by the end of this year and, with our last note on Savannah having flagged the possibility that Savannah would arrange an interim funding solution in the meantime, the terms and quantum of the loan facility announced today are entirely consistent with our expectations."

Shore Capital provides issuer sponsored research and corporate access services to Savannah Petroleum PLC

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