reece55 said:
Yeah, ok mate..........
If you review my earlier post, I stated not to enter this one when it was at 1.30..... last time I checked, if I was short (which i'm not) I would still be in the money by about 10% even after todays move upward.
Todays action may make me revisit my analysis, but mate a bounce is still just a bounce - a trade long here is still a trade against the trend. But good luck if you like catching knives! The raw fact is they paid too much for Delphi - its just that simple if you ask me.
Cheers
Another opinion perhaps, at this sp the market places little value on any exploration upside or perhaps the true discounted cashflows atributable to Delhi?
I'm not a holder, however I've been watching it closely for some time, and of course are interested in all your comments. The 40 ft barge pole remark concerns me somewhat, however that why we all follow this site - to be challanged in our opinion.
The peake oil theory is also open to conjecture - less oil/growing demad by oil stocks used to be my opinion. Now i look at as by oil stocks market disapointed by down trend in production SP punished - we all need oil stocks with stong cash flows and reserves, exposed to the upside in the oil price, and hopefully the right exploration plot!
Cheers BT
Overlooking The Beach
Source: FN Arena News - February 14 2007
By Greg Peel
"Now that Beach should be joining the big league, it follows that more leading brokers will initiate coverage of the stock. This usually means share price support, particularly as fund managers will start to take an interest."
I wrote that in September. I was wrong, wrong, wrong. The Beach Petroleum (BPT) share price has since fallen steadily from $1.60 to under $1.20 and still only one broker in the FNArena database of leading brokers and researchers – Merrill Lynch – covers the stock. However, Intersuisse covers the stock, and the analysts believe it is the market that is wrong, wrong, wrong.
Beach Petroleum leapt into the headlines last September when it went from oblivion to the fifth largest oil and gas company on the ASX. Beach shocked the market by significantly gazumping sector heavyweight Santos (STO) in its bid for Delhi Petroleum. While the price was a full one, Merrill Lynch suggested the jump in scale and size would generate a lot more interest in Beach.
Beach has secured the share in Delhi. However, apart from paying a full price, the company had to significantly expand its capitalisation through debt facilities and capital issues. This was not well accepted by the market. To top things off, the oil price has been in decline ever since.
Moreover, Beach had previously been a "serial underperformer", poor at managing investor relations, poor at attracting analyst interest and not a good payer of dividends, notes Intersuisse. A whole raft of reasons why no one much has given the company a second thought since.
But Intersuisse believes the market will finally begin to re-rate Beach as it sees "tangible evidence of strong operating and financial performance, likely over the course of FY07". Another reason why the market is slow to move, says Intersuisse, is because it's waiting for the first half result on February 28. That result will probably be slightly down on the previous corresponding period, the analysts expect, but the second half result should be "much stronger", and FY08 even stronger still.
The acquisition of Delhi, effective from January, has increased Beach's "barrels of oil equivalent" from 63m to 101m, and shifted its gas/oil ratio from 90/10 to 70/30, notes Intersuisse. Beach believes Delhi's reserves, particularly of oil, can be substantially lifted. Beach also has fingers in pies elsewhere, including the Gippsland and Cooper Basins (oil & gas), as well as a coal seam gas project in Queensland and, according to the analysts, an "important and growing presence in the renewable energy sector".
Beach is also exploring vigorously, and will participate in about 100 appraisal wells in FY07.
Intersuisse is forecasting a first half profit just under $30m, but a full year FY07 profit of $120m, rising to $185m in FY08 as various projects kick in. The analysts rate the stock a Buy.
So too does Merrill Lynch, having done so back in May last year. The analysts are maintaining a target price of $2.00. The stock closed at $1.125 yesterday.