The team at Macquarie have run the ruler over the mid-cap energy sector, and there's one company they say stands out from the crowd.
Macquarie analysts are tipping a 41% increase in the share price of Amplitude Energy Ltd (ASX: AEL), forecasting the shares will hit $4, up from $2.84 at the time of writing their report.
They say the market is "risking the exploration program too heavily and we are particularly encouraged by the recent ConocoPhillips discovery at Essington-1''.
That refers to a new offshore gas discovery announced by ConocoPhillips last month, which spurred significant interest in the shares of its joint venture partner 3D Energi Ltd (ASX: TDO).
ConocoPhillips owns a 51% stake in the project and is the project operator, while Korea National Oil Company owns a 21% stake, and 3D owns a 20% stake.
The Australian company said in a statement to the ASX at the time that the Essington-1 drilling program had intersected two gas bearing reservoirs, with one having 58.5 metres of net gas pay while the second had 31.5 metres.
Image source: Getty Images
Cashed up for growth
Amplitude Energy has its own exploration program on the cards, as Chair John Conde told the company's recent annual general meeting:
A few weeks ago we announced the proposed expansion of the East Coast Supply Project through an intended fourth well at the Nestor prospect. This expansion will maximise utilisation of our existing Otway Basin infrastructure and available processing capacity at the Athena Gas Plant, creating flexibility to supply gas during periods of high demand and pricing, including for gas-powered electricity generation.
Mr Conde said the engineering and drilling regulatory approvals for the Nestor drilling were already in place, and together with its joint venture partner, OG Energy, the company was working towards making a final investment decision in early calendar 2026.
To fund this and other growth opportunities, such as the potential restart of the Patricia Baleen field in the Gipplsand Basin, our company completed a $150 million equity raising in mid-October. We are very pleased with the level of demand shown for the equity raising, including from several new institutional investors and of course, from many of our loyal shareholders.
Amplitude Energy was valued at $872.9 million at the close of trade on Friday.
Among other energy stocks, Macquarie has a neutral rating on Karoon Energy Ltd (ASX: KAR) and a neutral rating on Strike Energy Ltd (ASX: STX).
