Is this the right time to exit from Finder Energy Holdings Limited?

Company Overview

Finder Energy Holdings Limited, founded in 2004, is an oil and gas exploration company based in Perth, Western Australia. The company has a significant acreage portfolio in Northwest Shelf (NWS), a region abundantly rich in hydrocarbons in Australia.

Initial Public Offering

The company had launched its IPO on the Australian Securities Exchange under the ticker FDR and had raised AU$ 15 million with 20-cent shares. We had covered this IPO in our ‘Kalkine IPO Report’ on March 10, 2022 and had assigned this IPO with a “Neutral” rating given the relatively weak financial health of the company, volatility in the oil markets, and relatively smaller size of the company.

Daily Price Chart (as on May 05, 2022). Source: REFINITIV, Analysis by Kalkine Group

Conclusion

Investors who have invested into this IPO can consider ‘Exiting’ from their position at the closing price of AU$ 0.23 as on May 05, 2022, given:

• Commodity Price risk: The price at which the company sells its oil and gas can influence its financial success and permit value. Any significant drop in realized oil and gas price might cause delays in transactions and exploration programs, as well as a reduction in the company's booked reserves.

• Regulatory risk: The company's operations are subject to Australian and UK regulatory requirements. Any changes to these requirements may affect or restrict its right to conduct its business of exploration and development activities.

• Other Risks: The company's other risks include the cost of drilling, exploration costs, equipping and developing operating wells. Hence, a surge in these costs may adversely impact the company's viability.
  

*The reference data in this report has been partly sourced from Refinitiv

Disclaimer

Kalkine New Zealand Limited is authorised to provide general advice only. The information on this website does not take into account any of your investment objectives, financial situation or needs. Before you make a decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement from the product issuer. You should consider the appropriateness of advice taking into account your own objectives, financial situation and needs and seek independent financial advice before making any financial decisions.