Global Petroleum Ltd Share Price Surges By 34.09%

At the time of writing, shares of Global Petroleum Ltd [ASX:GBP] are up by 34.09%, to 5.9 cents per share.

Why did Global Petroleum Ltd share price do this?

The company announced it has signed an agreement to acquire an offshore petroleum block (Block 2011A) in offshore Namibia on Wednesday. Global Petroleum will hold an 85% interest in the new block as operator. Namcor ― a state-owned oil company ― and Aloe ― a local private company ― will have carried interests of 10% and 5%, respectively.

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What now for Global Petroleum Ltd?

The news didn’t do much for the share price on Wednesday. Take a look at the chart below:

Global Petroleum Ltd share price

Source: Commsec

The market pretty much shrugged off the news. But that’s changed today. The market has taken interest of the acquisition and that’s sparked a flurry of buying. The share price topped 6-cents earlier in the day.

US$26.95 billion-capped Repsol SA [REP:SM] drilled the Welwitschia-1A well in 2014. Welwitschia-1A was drilled in the western part of Block 2011A. It targeted the Upper Cretaceous sands on the crest of a large structure. Unfortunately, the well was dry and didn’t encounter a petroleum reservoir.

Global Petroleum believes Repsol focused on the wrong target. It sees significant prospectivity ― similar to that in PEL0029 ― in the deeper Albian Carbonates, which Welwitschia-1A did not reach.

The bottom line: The block offers a high-risk, high reward play for crude oil speculators. Block 2011A is a true wildcat well.

In my view ,Global Petroleum offers significant share price potential, if the company’s theory is correct and crude oil exists in the deeper Albian Carbonates.

Jason Stevenson,
Resources Analyst, Markets & Money

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Jason Stevenson is Markets & Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options. He originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest. Whether it’s gold, crude oil, copper or an obscure metal like vanadium, you can rely on an in-depth analysis in Markets and Money. Jason also brings you extensive macro, political and geopolitical analysis from around the world. He leaves no stone unturned when it comes to telling the truth. Jason is also the lead analyst of Gold Stock Trader, a premium service for investors serious about precious metal stocks. Websites and financial e-letters Jason writes for:

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