Stockbroker Cenkos has highlighted the ‘billion barrel potential’ available to 88 Energy Ltd (LON:88E) as it repeated a ‘buy’ recommendation that comes with a very substantial target price.

Pitched at 2.8p the broker’s price target implies the Alaska explorer’s shares could rise to around 6 times the current level of 0.43p.

It comes after third party data analysis 3provided the basis for a new resource estimate for the conventional oil targets at Project Icewine.

A resource update authored by ERC Equipoise detailed some 1.7bn barrels of potential earlier this week, included some 1.4bn in a single prospect in the Seabee formation which was found to be bigger than expected in an otherwise disappointing Charlie-1 well, drilled by Premier Oil and 88 Energy in 2019.

Cenkos analyst James Mccormack highlights that the well encountered substantial net pay and excellent oil saturations in cores.

At the same time, the analyst looked to upcoming catalysts for the recently acquire Project Peregrine.

“At Project Peregrine, after receiving multiple bids, 88 Energy has selected a preferred bidder, with execution of the farm-out expected in the next few weeks.

“Planning and permitting remains on schedule for an initial exploration well at Project Peregrine in late February 2021. Project Peregrine is located south of and on trend with the ConocoPhillips Willow discovery to the north”

Peregrine, like Icewine, has received a blue-sky evaluation from ERCE which sees potential for 1.6bn there.

“Simultaneous to the drilling at Project Peregrine, we expect 88 Energy to launch a formal farm-out process at Project Icewine, with a view to attracting a partner to fund the drilling of additional wells at Project Icewine, commencing in 2022,” Mccormack added.

In London, 88 Energy shares rose by 7.2% to 0.43p on Thursday.

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