The news that the two Hides G-pad wells in Papua New Guinea intersected the key Toro reservoir recently lifted MPW's NAV for Oil Search by 5% to $10.68 per share, at a time when Oil Search shares were at $9.82 each.
While the gas boost is expected to lift the project's reserves, MPW said it was too early to see whether it had further de-risked a third train expansion for PNG LNG (Oil Search 29%).
"It is likely to be four to six months before there is confidence in the quantum of Hides upside," MPW said.
The analysts were also looking forward to the Hides Deep exploration well, two Total-led, Elk-Antelope appraisal wells planned in PNG's Gulf province that Oil Search has stakes in plus two appraisal wells in the company's Taza field in Kurdistan.
"Entering such rich vein of news flow, we continue to believe Oil Search can create the necessary NAV to push the share price higher," MPW summarised in its report, which maintained an outperform rating on the stock.
"Indeed, we note that with success at Hides, Elk/Antelope and Taza [clearly an upside case], our Oil Search NAV could rise to almost $16 per share in just two years."