Kris Energy

Kris Energy: HSBC initiates at Underweight with TP $1.10. Notes KrisEnergy is a young E&P company with an experience team operating in familiar geographies. Meanwhile, KrisEnergy’s diversified portfolio of 14 assets (7 operating) spans the whole E&P lifecycle. This will rise to 16 assets upon the successful acquisitions of Block 9 and G6/48. The co has potential for significant reserve upside, with exposure via its Vietnam blocks. Nevertheless, the house expects KrisEnergy to post net losses over 2013-15, due to significant build in G&A and financing expenses. Hence while HSBC views a high probability of mgt creating long term equity value, in the intermediate term, potential for share price appreciation is less certain.