Inspired by Ed’s recent clear trends article, Gareth has been reviewing the African oil sector. All the companies have done well, given the oil price backdrop. However, one company stands out to me as particularly cheap on forecast earnings and, unlike some of the others, has modest net debt.
Afentra (LON:AET) has had an eventful few months. A strategic review process was triggered in March by press speculation but has now concluded, with the Board deciding to remain independent. The company has secured a new financing facility, FY25 results were released, and its first development well is currently drilling. I’m intrigued to take a closer look.
Disclosure: At the time of publication, the author does not hold a position in Afentra PLC.
The Pitch
Afentra (LON:AET) is an AIM-listed upstream oil and gas company, focused entirely on West Africa. It was formed in 2021 through the restructuring of Sterling Energy via a cash shell by former Tullow Oil executives. Paul McDade stepped into the CEO role, Ian Cloke took the key COO position, and Anastasia Deulina became CFO.
The company entered Angola in 2022, acquiring non-operated interests in Block 3/05 and Block 3/05A through a series of transactions with Sonangol, INA, Azule Energy, and, most recently, Etu Energias. On completion of the Etu deal (now restructured to include Sonangol as a co-participant), Afentra will hold a roughly 33% working interest in Block 3/05 and a 25% working interest in Block 3/05A. It has also been awarded a 40% operated interest in the adjacent Block 3/24 through direct negotiation with the Angolan government.
The Stockopedia algorithms give the company a respectable but not outstanding overall StockRank of 64.
- Value Rank 41: A forward P/E of just 3.1x makes the company look very cheap, but it is held back by a lack of dividend yield and a Price to Book of 2.42x.
- Quality Rank 53: This reflects the inherent variability of oil-company earnings and its impact on operating margins and returns on capital. The F-score is only 3/9, picking up the weak FY25 results.
- Momentum Rank 85: The shares are up around 50% over the past year, materially outperforming the broader market. All of this rise occurred in 2026 and is due to the market pricing oil much higher in response to the Iran War. Analyst earnings estimate upgrades…
