Beach Energy Ltd

BPT Details
Strategic steps to improve performance despite oil price volatility: Beach Energy Ltd (ASX: BPT) is making changes to Senior Executive Team and has also taken few strategic steps to respond strongly to low oil and gas prices. The company’s JV interest in PRL 87 with Cooper Energy Limited witnessed well spudding for Penneshaw-1.

 

Penneshaw-1 Location (Source: Company Reports)
 
The company has completed successful merger with Drillsearch which delivered 100% ownership for core PEL91 and PEL 106 Western Flank permits. This resulted into annual pretax cost saving of about $40 million. The company has also completed an organizational design review and implementation of changes to its operating model. This helped the company to manage oil price volatility. Beach Energy also marked this year with record production of 9.7 million barrels of oil equivalent production. The new facilities at Pennington and Stunsail field and additional production following the Drillsearch transaction aided the strong production for the year. Beach Energy reported material reduction in cash flow breakeven to a world-class US$26 per barrel and has generated $233 million in operating cash flow. The company has planned capex of $180 million of which $100 million is discretionary expenditure, 65% of which is going straight into the Western Flank. Beach Energy is targeting 10% reduction in drilling costs and greater than 15% SACB and SWQ JV field operating cost saving. It is also planning expansion of 120,000 barrels of fluid per day. Additionally, new wells would add more to production. We recommend a “Buy” on the stock at the current market price of $ 0.88

 
BPT Daily Chart (Source: Thomson Reuters) 

Senex Energy Ltd

SXY Details
Joint venture to benefit: Senex Energy Ltd (ASX: SXY) has entered into an exploration joint venture with Origin Energy Ltd and this JV would position the company to exploit opportunities created by the demand for gas on the East Coast as big LNG projects suck out existing gas for export.
 
September quarter details (Source: Company Reports)
 
Senex has also completed Glenora plant development in Western Surat gas project. Senex is 100% owner and operator of the project and has signed a flexible 20-year gas sales agreement with key LNG counterparty Santos GLNG. The company’s cash balance at September 2016 was at $93.5 million and it has undrawn facility of $77 million. Senex delivered net oil production of 210,000 barrels for the quarter. Senex is planning to drill minimum of six wells in the Cooper Basin in FY17 primarily targeting reserves replacement. We recommend a “Buy” on the stock at the current market price of $ 0.24

 
SXY Daily Chart (Source: Thomson Reuters) 

Cooper Energy Ltd

COE Details
Gas sale agreement:Cooper Energy Ltd (ASX: COE) has executed a binding gas sale agreement with Owens-illinois (O-I) Australia for the sale of gas from the Sole Gas Project in Victoria. Cooper holds 50% interest in Sole and the Orbost Gas Plant with the balance being held by Santos Ltd. Cooper has also restarted the drilling of an oil development and appraisal well in PPL220, in which it has 25% interest and Beach Energy Ltd holds the balance. The company’s JV interest in PRL 87 with Beach Energy Limited is progressing well with spudding for Penneshaw-1 being done. COE’s FY17 production is expected to range between 240,000-280,000 barrels, all sourced from the Cooper Basin following a planned exit from Indonesia in July 2016. Cooper Energy has generated revenues of $4.9 million during September quarter, down 16% from previous quarter, while production was down 13% from previous quarter. On the other hand, the company has raised $17 million through retail entitlement offer, and this was supported of entitlement offer that drew demand in excess of raising of $41.1 million. Looking at the prospects, we recommend a “Buy” on the stock at the current price of $ 0.32

 
COE Daily Chart (Source: Thomson Reuters) 

88 Energy Ltd

88E Details
Appraisal drilling can add to success: 88 Energy Ltd (ASX: 88E) updated that spud has been scheduled for 1Q2017 the project Icewine#2 and permitting is on track for completion by end of the year. The appraisal might give the company a value in the range of US$150 million and US$380 million. About Seismic acquisition progress, the company said multiple large conventional leads are identified in Brookian Sequence over project Icewine#2. Around 758 million barrel of prospective mean recoverable oil has been identified in top 5 leads. Further, seismic interpretation and mapping is about 50% complete with potential for additional leads to be identified.

 

Oil Resources (Source: Company Reports)
 
The company has successfully completed placement of $11 million with two US based institutional investors. Post completion of the placement, the company has ~$28.2 million in cash. The appraisal result for its Icewine project is going to be a game changer. We think the stock is a “Speculative Buy” at the current market price of $ 0.037

 
88E Daily Chart (Source: Thomson Reuters) 

Sundance Energy Australia Ltd

SEA Details
Strong results:Sundance Energy Australia Ltd (ASX: SEA) reported an adjusted EBITDAX of $11.9 million or 68.2% of adjusted EBITDAX margin for the third quarter. The company successfully continued to decline cash operating costs from $14.17/Boe for the year ended December to $11.4/Boe for the quarter. Net oil, natural gas and natural gas liquids production included flared gas, totaled 564,522 Boe or 6,136 Boe/d for the quarter 2016. Furthermore, the company brought 6 gross (5.7 net) Sundance operated Eagle Ford well into production during the third quarter.

 

September quarter performance (Source: Company Reports)
 
Sundance also closed on its acquisition of 5,050 acres in McMullen County, Texas prospective for the Eagle Ford with purchase price of $15.4 million. The transaction includes incremental working interest in 20 gross Sundance operated production wells and 6 gross non-operated production wells, generating approx. 600 boe/d. Sundance further brought two gross Sundance operated Greater Anadarko Basin well into production during the quarter. The company maintains a sponsored American Depository Receipt (ADR) program trading on NASDAQ. We believe that the stock is a “Buy” at the current market price of $ 0.18

 
SEA Daily Chart (Source: Thomson Reuters) 

Buru Energy Ltd

BRU Details
Sale of Yakka Munga Pastoral Station: Buru Energy Ltd (ASX: BRU) has finished the sale of the Yakka Munga Pastoral station to Shanghai Zenith (Australia) investment holding Pty Ltd for a contract price of $9.9 million before costs. The company has revised Alcoa gas sales contract according to which Buru may repay to Alcoa the sum of $12.5 million on or before December 28, 2016, and if it does so, the final installment of $12.5 million would be due for payment on June 30, 2018. During the quarter, the company spent $2.2 million towards the ongoing Ungani oil trend evaluation, technical TGS evaluation. Going forward, Buru Energy expects $1.8 million of cash outflow towards exploration expenses. Ungani oil fields, Blina and Sundown oilfields have remained shut-in. The company has received an approval of next Native Title agreement, which facilitates further appraisal, and development of Canning Basin gas resources. We rate the stock a “Speculative Buy” at the current market price of $ 0.19

 
BRU Daily Chart (Source: Thomson Reuters)

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