- Ryder Scott updated its estimates for SEA post the acquisition, with 2P reserves increasing to 170.7mmboe, for a 2P PV10 of US$936.6m (or A$1.2bn).
- 2P PV10 of A$1.2bn compares well to our SEA valuation of A$1.4bn, with both significantly higher than SEA's current pro forma EV of circa A$600m.
- Current spot oil price valuation of A$0.22ps, indicating the oil price does not have to do the heavy lifting for SEA to be re-rated post acquisition.
- Post deal, we expect SEA's share price to find support as management advances its development plan on its new expanded acreage portfolio in core Eagle Ford.
- We maintain our Add rating, viewing SEA as trading at a large discount to its peers on an P/NPV and EV/2P basis. Our A$0.21ps valuation remains unchanged.
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