OEL’s two wells that have just completed drilling have both failed to achieve a positive outcome. We have written down our valuation of the Bivouac Peak project to zero thereby reducing our OEL price target. However, the short-term weakness in the share price presents a buying opportunity as OEL is well protected on the downside by its free cash flow and large drilling program. We maintain our Buy recommendation on OEL but with a reduced-price target of $0.10.
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