BPT 2.90% $1.68 beach energy limited

Why I like BPT (for B2)

  1. 9,081 Posts.
    Hi B2 (hope u don't mind the abbreviation)

    I don't know how much you know about BPT but here are some salient facts that might help you to sleep more easily re your investment in BPT:

    1. Since consolidation BPT only has around 181 million shares on issue ... it is on a respectable PE ratio of around 12.5 with a market capitalisation of about $65 million.

    2. Net profit for the 6 mths to Dec 2001 was $518,000 but that is about to change dramatically - why?

    - in the 2001/2 FY revenues from the Bodalla field in Qld. will need to be factored in. Beach acquired full ownership of this field late last year

    - Beach has had recent success with 4 gas wells in Victoria's Otway Basin and gas from these wells is being sold to the Victorian Market from March this year

    - In July this year Beach struck oil in 2 wells in the Cooper basin in SA (Acrasia-2 & Selliks 1)

    - Beach has, from June 2002, proved and probable reserves of 3.8 million barrells of oil. This figure, given recent developments is very conservative.

    - The current Maslins well, with its hydrocarbon shows that are exciting the market, is a 13 million barrell target (according to Huntley) but this could be conservative. Success at Maslins could double the share price and with follow up wells planned in quick succession you can understand why the market is so excited.

    - Management is sound and has the cashflow to fund a vigorous and diverse exploration programme.

    - Even if Maslins fails, there is limited downside in this profitable, well managed producer / explorer.

    You asked me about other oil stocks -

    I don't deal with out and out non-producing specs as they are, in my view too risky. And I avoid oil stocks where it is a do or die gamble on the outcome of one or two wells.

    Woodside and Santos are my two long term picks.

    I think Novus Petroleum has been very oversold and is one to watch for a recovery.

    Beach is my tearway favourite for leverage and is a long term hold.

    if you want a rank spec outsider, Essential Petroleum (EPR) might be one to keep an eye on as it has an exciting drilling prospect coming up next year .... no rush to get in as it may well weaken further. I hold BPT, WPL, STO and NVS.

    I don't hold EPR because I don't like to gamble ... but if I was a gambler I would probably pick up a few EPR for a flutter.

    Hope this answers some of your question, Brunette.

    (As always, do your own research as mine may or may not be flawed)

    Cheers, X
 
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