Interra Resources surges 39.5% to $0.30, the highest since 2007, after two analyst reports tout it for Myanmar exposure. CIMB tips the oil stock as a cheaper Myanmar play at 17x historical P/E, vs property stock Yoma's 37.2x. House believes Interra has earnings potential if the company executes well. Tips a Technical Buy on the weekly chart's bullish breakout flag pattern with stock topping out around $0.275-0.33 resistance.
UOB KayHian also highlights Interra as Myanmar's largest onshore oil producer with gross prodn of 2,500 bpd. House notes Interra is investing to drill deeper wells to boost prodn by 10-15%. Tips the stock as overbought but it has since surged past the house's $0.28 upper-bound target. No ratings given by both houses.
We like to highlight that Interra has interests in 3 marginal oil fields in Myanmar and Indonesia and the share of prodn form its Myanmar oil well is is about 550 bpd vs the gross prodn of 2,200 bpd. Total share of oil prodn from all 3 fields is about 900 bpd, which gives it an estimated revenue of US$33m based on average sale price of US$100 per barrel of oil and net profit of under US$4m. At $0.30, stock trades at P/B of 1.7x.
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