OREANDA-NEWS. September 03, 2013. Shares in Fortune Oil (LON:FTO) are a compelling proposition, reckons Oriel Securities.

“The shares are trading at a c.45% discount to the see through value of expected net cash and the stake in China Gas, with no value attributed to the on-going business,” the broker argued, as it reiterated its ‘buy’ recommendation in the wake of Fortune’s interim results.

The results confirmed Fortune will seek approval from shareholders for a special dividend of 2.36p a share, and a waiver from Rule 9 of the UK Takeover Code for a general offer to be made for the company by persons owning more than 56.9% of the company.

Net assets increased 32% to ?327.4mln following a further appreciation in Fortune’s investment in China Gas Holdings. Net debt at 30 June 2013 stood at ?69.3mln, versus debt of ?61.1mln at the end of 2012. The group does not envisage any difficulties meeting loan repayment obligations or investment commitments, the broker notes.