coe strike oil, page-7

Jojo"

Intersuisse agrees with you. This is from them today:

Cooper Energy (COE)
Situation Update
Strong Buy
$0.26

Christies oilfeld drilling success continues
COE has announced the results of wireline logging from the Christies-3 well in the Cooper Basin (30% stake), which reveal 20 metres of net oil pay at four levels within the well. By comparison, the recent Christies-2 well is interpreted to host 19 metres of net pay.

A total of 10 metres of net pay were interpreted in the Christies-3 well in two zones within the Namur Sandstone, while a further 7 metres was intersected in the lower Birkhead Formation/Hutton Sandstone, and an additional 3 metres within the mid-Birkhead Formation sandstone whch was not well developed in the Christies-2 well.

Christies-3 will now be completed for production and a short flow test will be undertaken next week.


Impact
We are upgrading our recommendation on COE from Spec Buy to Strong Buy. This is because despite its relative minnow status, COE in our view represents a relatively low-risk opportunity.

It now has production from 3 separate Cooper Basin oilfields, Christies, Worrior and Sellicks. On the back of its recent drilling success, gross production from 2 of these fields, Christies and Worrior, is set to jump from 500 barrels to 2,000 barrels a day.

COE is currently earning around $0.5m a month from net attributable production of around 780 barrels per day (bopd) from its 3 producing fields. We anticipate that production will increase to at least 1,000 bopd by the end of 2004, netting COE around $1.0m per month from then on. We anticipate EPS of 6.0c in 2004/05.

COE currently has $10m cash on hand and no debt, and has no oil hedging in place which allows it to take full advantage of the current strong oil price.

From a drilling perspective, COE is involved in series of six back-to-back wells in the Cooper Basin in which it has interests of between 11.2% and 30%.

From a growth perspective COE is already looking ahead and has entered into a $0.4m seismic deal in Morocco, where it hopes that investigative work will generate targets of sufficient interest to attract a major by way of a farm-in deal. This would provide it with a higher-risk/higher-reward exploration opportunity than that currently offered by the Cooper Basin alone.

COE has a current market cap of just $29m and its share price is well below its 12-month high of $0.31, despite the fact that oil prices are at record highs and earnings are rising.

Rgds

R