OSH 2.13% $3.21 oil search limited

macca's valuation...nice!

  1. Yak
    13,672 Posts.
    Helps explain the push in recent days...

    Oil Search
    Valuation increased

    --------------------------------------------------------------------------------
    Stock: OSH AU
    Volatility Index: High


    We have taken the step of including a risked value for the Nabrajah oil discovery in Yemen (Oil Search interest is 28.3%). With the company drilling the fifth well on the structure, we anticipate a declaration of commerciality.

    Yemen represents the first major foray outside Papua New Guinea (PNG) for Oil Search. While activity to date has been relatively small scale, initial impressions are positive with the Nabrajah discovery, in our opinion, a likely development candidate in 2005.

    We have completed a discounted cashflow model under the Yemen PSC terms for a 9.5mmbbl Nabrajah discovery. This adds a less than breathtaking A$0.03 per share to our Oil Search target price, largely irrelevant when compared to the A$0.68 per share upside for a PNG gas pipeline development, but nonetheless a positive start.

    We have also taken the opportunity to add recently discovered Kutubu reserves reducing the field decline rate as production benefits from recent infill drilling.

    Earnings revision

    We have revised our forecast adjusted profit as follows: 2004 +5% to A$136m, 2005 +5% to A$143m, 2006 +10% to A$146m due to increased Kutubu production forecast and use of actual December oil price.

    Valuation, target, catalyst

    Valuation: $1.69. 12-month price target: $2.22 based on a discounted cashflow methodology. Catalyst: Approval of Highlands Gas Project.

    Action and recommendation

    We retain our Outperform recommendation for Oil Search with the stock trading at a 25% discount to our target price of A$2.22 per share
 
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Last
$3.21
Change
-0.070(2.13%)
Mkt cap ! $6.669B
Open High Low Value Volume
$3.33 $3.38 $3.17 $24.02M 7.382M

Buyers (Bids)

No. Vol. Price($)
9 109869 $3.20
 

Sellers (Offers)

Price($) Vol. No.
$3.21 10998 2
View Market Depth
Last trade - 16.10pm 03/07/2020 (20 minute delay) ?
(live)
Last
$3.21
  Change
-0.070 ( 1.96 %)
Open High Low Volume
$3.33 $3.38 $3.17 1915402
Last updated 15.59pm 03/07/2020 (live) ?
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