COAL seam gas company Metgasco could be targeted for takeover according to an appraisal of the company prepared by a market research and stockbroking firm.
The firm recommended stock- market investors buy Metgasco shares, forecasting the stock will increase in value "at least 10-15% from the current share price over the next 12 months".
The appraisal, prepared by Baillieu Research, set a price target for the company at 62 cents per share.
"The scale of (the company's gas) reserves gives Metgasco multiple avenues through which it can unlock value," the appraisal read.
However, the firm warned the company was a high-risk investment but did not explain that assessment.
Yesterday, Metgasco traded at about 19.5 cents a share which was down about 2.5% on a selling volume of about 850,000 shares.
The firm projected Metgasco would record gas sales of almost $3.9 million in the 2013/14 financial year and would expend about $7.3 million in the same period.
In other news, Metgasco has announced the completion of seismic survey work near Casino which began on November 2.
The work drew protests from groups opposed to the coal seam gas industry.
"The successful completion of the seismic (surveying) is another indication Metgasco is moving ahead with the objective of taking the company from an exploration phase to a production/commercial phase," the company said in a statement to the Australian Stock Exchange.
"Metgasco is now focused on its core well program which, subject to final approvals, is expected to get underway in November or early December.
Metgasco said it expects to drill a new coal seam gas well near the site of the seismic tests in April or May.