I had sold all my BPT a while back after Clough went into admin and Waitsia was delayed. Ever since then, BPT has stumbled from one mishap to another. I do not want to end up with BPT scrip unless the takeover premium is very high and I have sufficient safety buffer to dump it on the market while still protecting my profit.
By the way, in the earnings reporting summary article yesterday, there was this clippert on BPT...
Just six weeks ago, new Beach Energy boss Brett Woods was assuring disappointed investors he had got the message: he needs to focus on cost cuts and operational improvements before he can think about mergers and acquisitions.
“I don’t think you can trust me at this point in time … I’m not going to be executing anything in the mid term,” he said in June.
But will he need to go faster than that? Beach revised down its reserves by 31.5 million barrels of oil equivalent (more than the 19 mmboe fall expected) because its oil and gas projects are either underperforming or are smaller than first thought. On Monday, a project called Enterprise was in the spotlight; now it’s up and running it’s become clear the resource pool is shallower than Beach hoped.
Citi analyst James Byrne says that is a signal that Beach will need to spend up to improve its reserves – and that introduces risk. “We expect the rapid degradation of portfolio quality would require substantial M&A to dilute the poor-performing assets,” he says. “Investors could instead wait for transformation execution to de-risk and for Beach to do its deals to better understand what this business will look like.”
618
STX Price at posting:
17.0¢ Sentiment: Buy Disclosure: Held
(20min delay)