good buy price, page-5

Capt Goodvibes,

I find it interesting to compare Beach (BPT) with Woodside (WPL).

Annual production:
BPT - approx 7 Mboe
WPL - approx 70 Mboe

Market Cap:
BPT - approx $900 million
WPL - approx $33 billion

UBS/Bell Potter estimated P/Es:
BPT - 06/11 = 23.9 WPL - 12/10 = 20.8
- 06/12 = 20.8 - 12/11 = 24.2
- 06/13 = 48.3 - 12/12 = 13.8 (Pluto revenue)

So for one tenth the production BPT is valued at around one 36th the market cap, but similar on P/Es in the short term. It makes me wonder why WPL is 3 to 4 times more profitable per Mboe. If it's due to scale and the exposure to export markets, then BPT's value is not going to be just a matter of scaling up the market cap in line with the lift in production volume. BPT's profitability may increase by another 3 to 4 times due to the additional economies of scale, and to the exposure to export markets that the Santos and Itochu deals provide.