http://www.proactiveinvestors.co.uk/companies/news/70627/falcon-oil-gass-shale-strategy-is-yielding-results-says-finncap-70627.html

Falcon Oil & Gas’s shale strategy is yielding results, says finnCap

By Jamie Ashcroft July 23 2014, 1:53pm

Falcon Oil & Gas’s (LON:FOG) strategy of monetising unconventional hydrocarbon assets is yielding results, according to broker finnCap, which today began covering the AIM stock with a ‘buy’ recommendation.

Analyst Dougie Youngson says the group’s assets in Australia, Hungary and South Africa should see substantial increases in value upon completion of farm-outs and subsequent exploration activity.

The analyst’s bullish view is reflected in his 27p price target which is some 200% higher than the current price of 9.1p.

A recently agreed farm-out deal for the Australian project, in the sought after Beetaloo shale basin, is a transformational endorsement of Falcon’s strategy, according to Youngson.

“This deal has proven that the strategy works.”

“The company has now proven that it can attract major industry partners and extract value from its portfolio.

“Falcon now has no future capital commitments and is carried through work programmes in both Australia and Hungary.”

“On the assumption that this drilling programme is successful, we will see a substantial increase in the asset’s valuation, with Falcon selling its stake ahead of any potential field development.”

The analyst also says he believes South Africa’s fracking ban will be lifted later this year, and this would trigger a farm-out there too.