Strike Energy (ASX:STX) current share price appears to reflect little to no value for its exploration and appraisal assets, including Ocean Hill and Kadathinni, according to a Wednesday note from Euroz Hartleys.
On Wednesday, the company said that recent seismic data interpretation at the Kadathinni and Ocean Hill prospects at its Perth Basin project confirmed their prospectivity, supporting further exploration and appraisal.
The three-dimensional interpretation of data at Ocean Hill suggests significant potential upside to the current contingent resources, the company added.
Euroz highlighted that recent Perth Basin transactions imply a valuation of AU$2 per gigajoule for discovered gas resources.
Success in Strike's 100%-owned prospects could deliver significant upside, potentially in the billion-dollar range, Euroz said, adding that the exploration upside of the Ocean Hill and Kadathinni assets deserves some value.
Euroz believes that Strike offers an asymmetric risk-reward profile and compelling value opportunity as shares trade near multi-year lows, and a chief executive officer appointment in May and a strategic review outcome in June may trigger a re-rating.
Euroz Hartleys maintained Strike Energy's buy recommendation and its AU$0.36 price target.
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