OIL 2.78% 3.7¢ optiscan imaging limited

perth oil conference

  1. 539 Posts.


    The oil conference was indeed interesting. The interesting point for me is it confirmed my favourites. I thought, although I am biased< that Arq still has the cleanest ,simplest and probably best story of the lot.

    It will be drilling 3-5 wells this year of which probably 3 exploration. The Hibertia 3d seismic being used on thos as well as some 2d. The Denison 3d program has begun and will be finished to enable an aggresive further drilling program beginning 3 rd 1/4 next yr.

    Eric mentioned that he has 30 solid leads- and that is before the extensive 3d program Denison. Also he mentioned they were producing at 6000 bopd now which means Hovea 8 has cleaned up well delivery so Hovea is producing at 5000 bopd and Eremis about 1000. They are now only restricted by gov approval to incraese that to about 7500 bopd by yr end.

    He mentioned that they would have a net oil to Arq this financial yr of over 900,000 barrels ( this yr was 350,000 barrels). Their profit this yr of $8.8m (ebidtda $19.9) would go to about $19m on my estimates depending on exploration spend.

    This has been achieved on back of Hovea and eremia alone-with numerous prospects to go. They are close to production and their facilities can handle 28000 b of fluid a day-a very very good simple story and highly leveraged to oil price. My favourite oil stock.

    AWE

    I was asurprised a bit by AWE. Did not expect to be as impressed as I was. The kicker for me is their most boring project but really it is a beauty. Bass Gas! They mentioned they would be earning about $30m profit from field from yr 1-I am aware some of the financiers have it as less but a great result when you look at its market cap.

    They really like Tui-no value in co for this at all-they think new play concept ( yes I know most of them do). They have 3d seismic and feeel about 10-20m barrels.

    Casino. They have recently bought this of Strike Oil ( unlisted co of Perilya). They paid $25m for this and consensus is they paid a very cheap price. A full appraisal well to be drilled next yr.

    They also have Jingemia of course and several large prospects including Fiddoch.

    They will have a large base income from which they can do the more esoteric exploration which can add the double co value play.

    This co is a very conservative co to invest in and get some blue sky. I would expect as they get closer to Bassgas revenue it will drift upwards.

    Roc/Amity

    Both excellent presentations. John Doran could make it on the comedy circuit although he is a little rueful of his share price. I prefer my companies a bit simpler with large programs in Uganda,equatorial guinea,china,Nz UK and australia. He loves Africa and there is indeed the potential for some very big finds-elephants. This company will suit some but not for me but he is very smart and a big find is very possible for Roc.

    Ayo

    Howard also gave a very polished presenation and Turkey is indeed performing for them at gas prices over $5. They have excellent customers in Turkey ( mainly power stations).

    They have no debt etc. But for me Whicher was very interesting as he is believes they have found a solution to the prior 4 drill problems on that program. Whicher is very tight sand similiar to USA. All 4 prior drilling has used tradiotional water injection which fractures the field. On this occasion he will drill normally to the sands and then will Air drill. This is used apparently successfully in US on tight sands. The hole will take until roughly Xmas so worthy watching.

    Tap

    This company is also powering. The talk by Ted jacobsen was primarily a discussion of some of taps upcoming new plays in NZ and Aus. It was technically very interesting but light on day to day material-they do put out every month or so an investors briefing so assume they felt everyone uptodate.

    The good news is that Wollybutt is still running at 28000 bopd and they should have the other drill platform fixed within 4-6 weeks. The key driver, to me, is whether they buy Exonns share of Woolybutt- a decision in next 6 weeks or so- and an increase in the fields reserves. This is in some ways more important than their very extensive drill program-one in the hand so to speak- a very professional well run co that will make about $30m again next yr.

    Hardman

    Never liked the Hdr hype much but must say they were impressive and market cap possible- not as stupid as I always believed-they have just raised $23m on the UK Aim marke tthey have cash of $50m-

    by 2005 they should have 15000bopd net share- if this pans out they are not expensive and they also have a lot of drilling coming up. The cost of the african production facilities will be about $85m to them so some financial engineering called for at some pt.

    VOY/Buy/osh

    Voy was the standout of the newer cos-Management has a good clean focus but they will need some further luck. Buy was oko and they have some big drill areas but they are struggling for JV partners and they are a bit too wildcat for me.

    Osh-the biggest co to present and very impressive- The MD could run anything. Osh contributes 20% of PNG GDP. Having said that I dont like PNG much and the key to its shareprice fortunes is the PNG pipeline-if they get it up watch that price rocket.

    Overall a very good conference which reiterated to me that Arq, lesser extent Tap are still my main focus but quite keen on Awe.

    Hope this helps a bit.




 
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