On Tuesday, Stifel adjusted its price target for VAALCO Energy (EGY:LN) (NYSE: EGY), a London and New York-listed oil and gas company, to GBP7.22, a decrease from the previous GBP7.36. Despite this change, the firm reaffirmed its Buy rating on the stock.
The revision comes after a thorough review of VAALCO Energy's financial year 2023 results, the company's guidance for 2024, and its recent acquisition in Côte d'Ivoire. The new price target reflects these factors, as well as a forward-looking net asset value (NAV) calculation extended to the end of 2024.
Stifel's analysis suggests that VAALCO Energy's growth prospects remain strong. The company's ongoing drilling campaign in Gabon, its operations in Côte d'Ivoire, and activities in Equatorial Guinea are expected to significantly boost production.
By the estimate for the year 2027, VAALCO could potentially increase its production to more than 35,000 barrels of oil equivalent per day (kboe/d), which would mark an increase of approximately 50% from current levels.
The slight decrease in the NAV from 736p to 722p primarily results from the NAV roll forward, according to Stifel. This technical adjustment accounts for the time value of money and the progression of the company into a new fiscal period.
Stifel's maintained Buy rating indicates the firm's continued confidence in VAALCO Energy's growth trajectory and its ability to deliver on its potential reinvestment opportunities. The company's strategic moves and operational performance appear to align with Stifel's positive outlook for VAALCO's future.
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