Beach Energy Ltd
BPT Details
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OPEC production cut agreement boosted the stock higher: Beach Energy Ltd (ASX: BPT) stock surged over 10% on September 29, 2016 driven by the solid recovery in the oil prices as OPEC agreed to cut production for the first time in eight years. The shares of Beach recovered over 7.2% (as of September 28, 2016) in the last four weeks after falling over 5.6% in the last six months. We believe the stock rally would continue in the coming months given the positive exploration results of Beach coupled with recovering oil prices. BPT is paying a dividend of 0.50 cents per share on September 30, 2016. Recently, the group reported that its Hanson?4 development well was cased and suspended as a potential oil producer post the intersection of over three meters of net pay in the Namur Sandstone and three meters of net pay in the McKinlay Member. The well is expected to be brought online in the second quarter of fiscal year of 2017. The Stunsail?3 development well located over 85 kilometers northwest of the Moomba processing facility is being assessed for potential for reservoir development in the Lower Birkhead Formation. This well has been spudded in August 2016 and is awaiting clearance of wet weather conditions before further drilling. The Callawonga?12 development well at Callawonga Field is cased and suspended as a future oil producer and forecasted to be brought online in the second quarter of FY17.
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Recommendation:
We recommend investors to stay invested and give a “Buy” recommendation on the stock at the current price of –$0.66
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Moomba Processing Facility (Source: Company Reports)
Origin Energy Ltd
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ORG Details
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Oil prices rally drove the stock higher: Origin Energy Ltd (ASX: ORG) stock also rallied over 7.4% on September 29, 2016 on track with its peers. The group’s joint venture with AWE Limited in L1/L2 appointed Perth-based RISC Operations is to make an independent review and certification of Reserves and Contingent Resources for the Waitsia gas field, located in onshore Permit L1/L2, northern Perth Basin, Western Australia. Based on this independent report, Waitsia gas field has 2P Reserves to offer at least 100 TJ/d for up to 10 years. Gross 2P Reserves are forecasted to be 460 Bcf of gas which is 34% higher than their earlier 2P estimate. ORG generated over 10% returns during this year to date (as of September 28, 2016) and has an outstanding dividend yield.
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Recommendation:
We maintain our “Buy” recommendation on the stock at the current price of – $5.36
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AWE and RISC estimates of 2P Reserves and 2C Contingent Resources (Source: AWE Company Reports)
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