“Currently, there is a great deal of uncertainty regarding the future of exploration and cash flows.” [fluxos de caixa] Futures contracts and how much of their share they can sell to other companies. However, in both cases, this will be a clear added value for Galp,” noted Henrique Tomé, analyst at xtb, in a written response to Lusa.
The rise in Galp shares is a natural reaction to the major commercial discovery in Namibia, and the final sale of the project makes it possible to reduce the risks inherent in oil exploration, analysts consulted by Lusa considered today.
“Currently, there is a great deal of uncertainty regarding the future of exploration and cash flows.” [fluxos de caixa] Futures contracts and how much of their share they can sell to other companies. However, in both cases, this will be a clear added value for Galp,” noted Henrique Tomé, analyst at xtb, in a written response to Lusa.
The analyst considered that if the company chose to explore that reserve in Namibia, it would have a very significant increase in future cash flow, given that this reserve has enormous potential.
On the other hand, if the company chooses to sell part or all of the project that it owns by 80%, it can raise a large amount of capital in the short term, which it can use in other projects or distribute to its shareholders.
Mario Martins, Chief Operating Officer of ActivTrades Brasil, also emphasized that “when an effective discovery occurs, the company makes a significant portion of its investments profitable, even if only in a potential way.”
The analyst explained that if the company puts part or all of the project up for sale, this “will enable part of this profitability to be achieved, in addition to reducing risks.”
“In the same way, the confirmation of these reserves provides raw materials for several more years of the company's operation, thus creating additional expectations of future profits,” Mario Martins added.
Namibia's oil reserve, in the first testing phase of the Mopan campaign, has the potential to be a “significant commercial discovery,” Ghalib told investors on Sunday.
In a statement sent to the CMVM, the company explained that “at the Mopan complex alone and before additional exploration and evaluation wells are drilled, estimates of hydrocarbons at the site are 10 billion barrels of oil equivalent, or more.”
The Lisbon Stock Exchange closed today on a positive note, with the PSI index recording a 3.50% rise to 6,515.47 points, the largest increase since November 2020, supported by Galp, whose shares advanced 20.64% to 19.35 euros.
“Writer. Analyst. Avid travel maven. Devoted twitter guru. Unapologetic pop culture expert. General zombie enthusiast.”
