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Stockbroker Peel Hunt sees offshore explorer Eco Atlantic Oil & Gas Ltd (LON:ECO) as a ‘buy’ and has pointed to substantial upside to the current price.

Analyst Matt Cooper initiated Peel Hunt’s coverage of Eco with a 100p price target, compared to a prevailing market price of 22.7p per share.

Cooper, in a note, described the company’s upcoming exploration campaign as “one of the most exciting” slated for 2021.

READ: Eco looks forward to fresh well activity in 2021

“Oil’s recovery has boosted E&P shares; however, the explorers have been left behind,” the analyst said.

“Our pick of the explorers is Eco, which plans two Guyana wells in 2021 (funded but subject to partner approval).”

Each well will target around 600mln barrels of prospective resources and each could result in a valuation of 250p per share (US$600mln).

Cooper added: “Eco’s 2019 Guyana wells found heavy oil, but in our view all data points indicate that light oil is likely to be found next year.

“Historically, explorers’ shares rise in the months preceding company-making wells, so we urge investors to consider this excellent risk/reward opportunity now.”