Oilex about to pop
Hartley's Valuation 317cps – Oilex has an experienced management and field team of over 75 people with offices in Australia, India and Oman. The Company has recently spudded its first development well at its cornerstone project in India and has also had recent success in Oman and Indonesia. With A$52m in cash, soon to be proven reserves in India, eight permits in prospective basins and a drilling program comprising over 15 wells this year, the risk/reward balance is heavily weighted towards the upside.
It has been a very successful year for Oilex, and 2008 is shaping up to be equally exciting. In India, production from Cambay and Sabarmati has met, or exceeded, the management's expectation; accordingly, it has arranged a long-term rig contract to drill six wells on the Cambay field and anticipates first production by Q2 2008, plus further definition of the reserve base. Some of the appraisal wells will be designed to test the Ogliocene avoiding the reservoir damage that is thought to exist in Cambay-72. Sabarmati also exceeded management expectations when put on pump so additional development will occur there in due course.
Appraisal drilling of the Pendalian discovery, in Indonesia, has revealed that Pendalian-3 has a production index of a possible 1,200bopd from pump assisted production. Both management and investors will be hoping that this well is able to meet this target when put on long-term production testing in Q3 2008. With a possible 3-5 development wells on the cards, this could be a significant asset to Oilex and a very well timed acquisition.
If that wasn't enough for one small independent oil company for one year, the management has topped things off with what looks like a heavy oil discovery from its first exploration well in Oman. With 12 successful months and a large fundraising behind it, Oilex has ambitious plans and an active drilling programme laid out. The management anticipates first production in Q2 2008, and that will be another significant step forward for the company.
Broker and Nominated Advisor, KBC Peel Hunt, recently released an update on Oilex. In the note, KBC said that it had a "core" net asset value of 64 pence per share, but there was considerable upside in this valuation depending on results in India and Oman. KBC added that they are anticipating over 20 wells in the next 18 months; 6 wells in India, 11 wells in Oman and 4 wells in Indonesia, plus the possibility of additional drilling at the company's assets in Australia if a rig can be secured.
I know people are a little freaked out by the market. but this is the perfect time to look around for the obvious stock plays out there.If you think oil and gas are places to be, then do your self a financial service and read what the hell is going on in this company. I went blue in the face trying to tell people about riversdale mining for a year when it was trading at $1. it hit $11. [the frigken assets were there for all to see]does anyone really think i care if the price moves up a little short term? am i talking my book? NO.
i really think the company warrants your time. let me know if i am wrong. happy to hear all views. forget about the pump and dumps out there promising quick money. There are so many 'dreamscapes' dressed up for punters, it takes a chain saw to get them out of the way. its a stock pickers parade right now and you better be dressed for the occasion. this is obvious for folk who are willing to go the 9 yards and get serious about the market.dyor.