broker view - macquarie

Outperform; Current Price A$1.22 Valuation A$3.04 12-mth price target A$2.50

Metrics; P/BV 2014/15 0.6 - EV/EBITDA 214 2.5x 2015 2.1x - ROA 2014 11.4x 2015 13.6x - PER 2014 7.9x 2015 5.8x

Debt; Net debt/equity; 2014 -5.2% - 2015 -11.8% - 2016 -20.7%

Revenue; 2014 $416.1mln - 2015 $485.2mln

PEG; FY0 2.60 FY1 0.02 FY2 0.15

Just bought Mitsui Tui assets for US$15mln. Or about US$7.3/bbl for developed reserves or an implied 85% discount to Tui NAV.

Recently had other accretive trades;

Selling 11.25% of BassGas to Toyota Tsusho for A$80mln
Buying Adelphi Energy where a 10% stake in Sugarloaf AMI has tripled in value.

They try to rally every few months but never really get off the canvas.

Deep value but has proved to be a trap historically. Several brokers have a conviction buy on the stock but it never sustains any rally.

There is scepticism about the Tui deal but perhaps it is just a really good deal and these guys are finding some form and the stock offers deep long term value.

No income for investors but as a small cap at A$632mln it seems a reasonable risk reward play.