paterson

Research note is available in full by going to


http://www.jupiterenergy.com.au/

easiser to see than to paste.
Maybe confidential but is freely available by going to JPR site. Makes interesting reading and ref// to a possible takeover target.... 247

RESEARCH NOTE
JUPITER ENERGY LTD
Investment Highlights
h We are initiating coverage on Jupiter Energy Ltd (JPR) with a
SPECULATIVE BUY recommendation and a price target of
$0.09/sh. JPR is an Australian exploration and production company
with operations focused in Kazakhstan which has a long history of
oil production, is ranked in the top 10 countries globally by oil
reserves and is expected to be one of the worlds largest oil
producers by 2025. JPRs primary asset is Block 31 (100% JPR)
located in the Mangistau Basin in South West Kazakhstan. Block 31
has mapped structures in two regionally significant reservoir
formations of Jurassic and Middle Triassic age. The Mangistau is a
prolific onshore basin with field sizes ranging from the giant Uzen
field (5bn bbls) to many 20 to 40 mmbbls fields V many discovered
by the Russians in the 60s and not developed. While not as
productive as some of the more celebrated Caspian fields the oil is
plentiful and onshore operations are simple.
h An oil capital of the world. Possessing an estimated 40bn boe in
reserves and being home to one of the worlds largest oil fields
(Kashagan), Kazakhstan is positioning itself as one of the oil
capitals of the world. Kazakhstan is expected to become one of the
worlds top ten oil producers by 2025. JPR is well positioned to take
advantage of this growth with an in country team.
h Transition from explorer to producer. JPR has recently made
the transition from explorer to producer with the J-50 well coming
on-stream in May. The well is currently on long term production
testing with stable average production rates of 435bopd being
achieved and peak production rates reaching over 600bopd. Going
forward, JPRs success will be determined by the ongoing
appraisal/development results of Block 31.
h Growing reserves base. Senergy has recently estimated JPRs
reserves in the Triassic formation. The estimated 2P reserves total
is 8.6mmbbls. In addition, Senergy has estimated a further
prospective resource of 12.2mmbbls, estimating an overall 2P/P50
resource potential of 20.8mmbbls. Senergy did not assess reserves
within the Jurassic formation which will be assessed post the
appraisal/development of the J-52 well (end 2011).
h Upside Potential. Upside potential will be driven by the successful
appraisal/development of Block 31 leading to reserve upgrades and
increased production as well as further appraisal and exploration
work on potential identified in JPRs permits and contiguous open
acreage. Near term catalysts include; 1) Granting of a trial
production license; 2) Updated reserves assessment based on J50
appraisal/development; 3) Appraisal/development of the J-51 well;
4) Appraisal/development drilling of the J-52 well and 5) Reserves
assessment to incorporate Jurassic volumes.
23 June 2010
12mth Rating BUY
Price A$ 0.04
Target Price A$ 0.09
12m Total Return % 150.9
RIC: JPR.AX BBG: JPR AU
Shares o/s m 886.2