With Inked Deal, Oil & Gas Co. To Own 100% of Subsidiary

Source: Bill Newman  (3/3/23)

With the transaction close, the acquirer will also assume total interest in the now jointly owned oil asset, noted a Research Capital Corp. report.

CanAsia Energy Corp. (CEC:TSX.V) agreed to buy Andora Energy’s common shares owned by minority shareholders for US$1.7 million (US$0.044 per share) in cash, reported Research Capital Corp. analyst Bill Newman in a March 2 research note. This will take CanAsia’s ownership of Andora’s common shares to 100% from 88.2%.

The deal is expected to close by this month’s end, noted Newman, and will likely catalyze CanAsia’s stock.

“We view this transaction as positive,” Newman added.

Research Capital maintained its Speculative Buy recommendation and CA$0.50 per share price target on CanAsia, noted Newman. The stock is currently trading at CA$0.22 per share, which implies a significant, or 127%, potential return on investment from here.

Stake in Resource To Change

Newman pointed out that with the transaction, the portion of the Sawn Lake resource net to CanAsia will increase to 100%, according to the updated resource previously prepared by Sproule Associates and effective Dec. 31, 2022.

The risked best estimate contingent resource net to CanAsia will increase to 248,200,000 barrels (248.2 MMbbl) from 218.9 MMbbl.

Accordingly, the after-tax net present value discounted at 15% of this resource will change to CA$198 million (CA$198M), or CA$3.98 per share, previously CA$175M, or CA$3.51 per share.

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1) Doresa Banning wrote this article for Streetwise Reports LLC. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: TAG Oil Ltd. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

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Disclosures for Research Capital Corp., CanAsia Energy Corp., March 2, 2023

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