Speculation over Johannesburg Stock Exchange (JSE) listed Hosken Consolidated Investments (HCI)’s future plans with its shareholding in a rich block off the coast of Namibia has been attributed to a 175% jump in the company’s share price over the past year.
HCI is reported to hold a 10% indirect interest in an oil find block with TotalEnergies, alongside National Petroleum Corporation of Namibia, QatarEnergy, and Impact Oil and Gas, located approximately 290 kilometres off the coast of Namibia, in the deep-water offshore exploration Block 2913B, which covers approximately 8,215 km²
“If it did not have the oil find, its share price would be fundamentally overpriced,” Analyst Anthony Clark of Small Talk Daily Research was quoted by Fin24.
He said speculation over HCI’s plans with its interest in the oil asset was having a bearing on its share performance.
“So, the market believes HCI might flip its stake and sell – and that is why the share price is running so hard. It is not running because of the underlying assets, which are known, like Tsogo Sun, eMedia, and Deneb. It is running because of the optionality of the oil assets. I would like management at some point to enlighten the market on what is going on with that potentially lucrative optionality on the oil find off the coast of Namibia,” Clark said.
The Analyst said HCI could exit the investment because of the long timelines and the huge investments required to develop the oil find until production.
“I have seen reports flying around from a number of independent oil consultants potentially saying that the [Namibia offshore] stake alone could be worth between R10 billion and R14 billion, depending on how you value a stake of something that is in the ground and has yet to come to production. Production could take 10 years and could cost billions of dollars, which I don’t believe HCI will participate in as it simply can’t afford it,” he said.
TotalEnergies Venus discovery offshore Namibia could be the world’s largest deep-water find, with the potential to surpass Buzios offshore Brazil, where recoverable reserves stand at 11.3 billion barrels of oil equivalent.
According to Upstream publication, three sources familiar with the latest analysis of data from the Venus-1 wildcat said the huge structures recoverable reserve, which are now thought to straddle block 2913B and 2912, could exceed 13 billion barrels of oil equivalent (boe).
Its recoverable gas, according to the publication, is estimated at 10 trillion to 20 trillion cubic feet.
Cirrus Capital estimates Namibia has the potential to generate over N$500 billion in potential revenues in the coming decade through taxes and royalties charged to the oil sector.
Hosken Consolidated Investments Ltd. (HCI) is a black empowerment investment holding company which is listed in the financial sector with an interest in Media & Broadcasting, Casinos, Hotel & Leisure, Clothing & Textiles, Transport, Energy, Property and Technology.
