Cavendish backs 88 Energy after Namibia exploration success

Core Viewpoint - Cavendish Securities has reiterated a 'buy' rating and a target price of 21.8p for 88 Energy Ltd, emphasizing the enhanced potential of the company's Namibian acreage following positive drilling results in the region [1] Group 1: Exploration Success - The recent Kavango West-1X well, drilled by a separate operator, confirmed significant net pay and hydrocarbon shows, and is now moving towards production testing [2] - The structural trends and carbonate reservoir targets identified are believed to extend into 88 Energy's PEL 93 licence area, indicating a promising exploration landscape [2] Group 2: Confidence in Petroleum System - The results from the Kavango West-1X well significantly boost confidence in the regional petroleum system and support the prospectivity of 88 Energy's eleven mapped leads [3] - The well effectively reduces the risk associated with a comparable play type that 88 Energy is targeting, enhancing the company's exploration strategy [3] Group 3: Future Plans and Market Position - 88 Energy plans to commence an airborne geophysical survey over PEL 93 in the first quarter of 2026, which is expected to improve subsurface mapping and prepare drill-ready prospects [3] - With a market capitalization of £12.2 million and an enterprise value of £7.8 million, 88 Energy remains highly leveraged to exploration success, with the Namibian potential viewed as a key value driver [4]