Decided to move some of my BKP profits into BAS at this time for the following reasons:
1. Windermere -1 is now looking likely for a Q4 (or at worst early 2012) drill. It is a small target (not a positive) but being a former oil discovery, it takes on more of an appraisal feel, so this helps to compensate as the chances of a successful drill are heightened (although, as always, never certain). 2. Capital Raising has been done. Shortfall placed...cash in hand. 3. The SP is within 10% or so of annual low, and it is supported by the recent CR at 2.5cents. 4. In the main, BAS have managed to gather some day-trader support for drillings (although we are currently operating in a difficult market which adds to the risk of limited profits). No guarantees here but given we should be heading into the Festive season, sentiment can be more positive (if the general market holds up and Europe stays afloat!) 5. The Chinese are looking at BAS's other permits (see earlier ASX announcement). It is a wildcard (and in itself no reason for me to purchase) but if they did become interested in Bass or Gippsland Basins, BAS would lift quickly. Remember what happened to MOG when Petrobas suddenly entered into WA 360? MOG became a multi-bagger in a short time frame.
So, based on these reasons, and given the low SP entry point, I'll see what happens. Even a simple 20% (in 1 quarter) would be a solid annualised profit in this market.
Just my thoughts...DYOR.
BAS Price at posting:
2.5¢ Sentiment: ST Buy Disclosure: Held
