EROMANGA HYDROCARBONS NL(ERH) Stock Report 15 May, 2008...

EROMANGA HYDROCARBONS NL(ERH)

Stock Report

15 May, 2008 (12:00:00 AEST)


Eromanga Hydrocarbons (ERH) soared 13.50c (or 93.1%) to 28.0c, its largest rise of the last twelve months. The rise is the largest in percent terms since it soared 3.50c (or 31.8%) on January 23, 2008. Compared with the All Ordinaries Index which rose 28.5 points (or 0.5%) on the day, this represented a relative price change of 92.6%.

TECHNICAL ANALYSIS
Significant Uptrend
Price Volume Trend: The price soared 93.1% in the last week and 86.7% in the last month. This has been propped up by extraordinary volume of 11.4 times average for the week and by high volume 3.3 times average for the month.
Relativities: Compared with the All Ordinaries Index which rose 2.9% for the week and 9.2% for the month, this represented a relative price increase of 91.5% for the week and 78.0% for the month. Since open its percentile rank in the Australian market was 100. In the Australian market of 2,084 stocks, the stock has a 6-month relative strength of 94 which means it is beating 94% of the market. A price rise combined with a high relative strength is a bullish signal. Also, the relative strength percentile is rising at 94 for 6 months, 96 for 3 months and 97 for 1 month.
Moving Average Price (MAP): The price to 200-day MAP ratio is 1.71, a bullish indicator. The stock is trading above both its MAPs at 16.41c for the 200-day MAP and 14.54c for the 50-day MAP, a bullish indicator. The 200-day MAP has increased to 16.41c. An increase is another bullish indicator.
Breakout: The stock traded at an eight-month high of 31.0c today.
Support: The support price is hovering at the 12.50c level. Volume traded at the support price zone was 2.2 time average during the single occasion when the support price was breached. In the last one month the first low was at 12.50c on May 06.
Resistance: Resistance is apparent at 31.0c. Volume was 158.2 times average during the single occasion when the resistance price was breached in the last one month. In the last one month the high was at 31.0c on May 15.

PRICE VOLUME DYNAMICS
Volatility: The stock traded between an intraday low of 15.0c and eight-month high of 31.0c. The price range has expanded in the last two days (from 2.50c two days ago to 16.0c today) which, accompanied by a price rise, is a bullish signal.
Volume and Turnover Period: There were 18,379,484 shares worth $4 million traded. The volume was 158.2 times average trading of 116,165 shares. The turnover rate in the 12 months to date was 148.8% (or a turnover period of 8 months). This average length of ownership of the stock at 0.6 times the average holding period of 1 year 24 days for stocks in the S&P/ASX 200 Index suggests a slightly larger number of speculators on the share register, making it less safe for long-term investors.
% Disc to High and % Prem to Low: The last price is at a discount of 20.0% to the 12-month high of 35.0c and a premium of 180.0% to the 12-month low of 10.0c.
Volume Weighted Price (VWP): The price is at a premium of 30.4% to the 1-month volume weighted average price of 21.46c. In the past year the premium has been greater than 30.4% just twice, suggesting a topish level and cautious buying at the current price.
Beta is 1.1.


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PRICE PERFORMANCE RANK IN INDEX AND SECTORS
The stock is in 1 index and 5 sectors.
The following sectors rose setting the trend for its rise of 93.1% (rank by percentage price change of stock for 1 day;6 months in sector/index in brackets):
Quarterly Reporting Entities Sector (rank 1;28 out of 443) which was up 249.4 points or 1.4% to 17,641.8,
Total Australian Market -x- All Ordinaries Sector (rank 1;56 out of 1281) which was up 23.8 points or 0.4% to 6,175.4,
Mining & Oil Sector (rank 1;52 out of 571) which was up 34.3 points or 0.3% to 10,853.7
The stock's rise went against the trend set by the following index and sector:
Diversified Metals & Mining Sector (rank 1;10 out of 142) which was down 36.0 points or 0.3% to 11,454.1,
S&P/ASX 200 Materials Index (rank 1;37 out of 467) which was down 44.7 points or 0.3% to 16,815.1

SHAREHOLDER RETURNS
Trailing One Week: The stock rose three times (60% of the time) and fell twice (40% of the time). The volume was 11.4 times average trading of 580,825 shares. The value of $1,000 invested a week ago is $2,074 [vs $1,030 for the All Ordinaries Index], for a capital gain of $1,074.
Trailing One Month: The stock fell nine times (43% of the time), rose nine times (43% of the time) and was unchanged three times (14% of the time). The volume was 3.3 times average trading of 2,555,630 shares. The value of $1,000 invested a month ago is $1,867 [vs $1,093 for the All Ordinaries Index], for a capital gain of $867.
Trailing One Year: The value of $1,000 invested one year ago is $2,000 [vs $982 for the All Ordinaries Index], for a capital gain of $1,000. The total return to shareholders for 1 year is 100.0%.
Trailing Five Years: The value of $1,000 invested five years ago is $5,600, for a capital gain of $4,600.

FINANCIALS
Half Yearly Report released on April 10, 2008; year-on-year comparisons with previous corresponding period:
In the half year to December 31, 2007 total revenue was up 1,143.5% to $155,880; net loss of $2 million.

Annual Report for the year ended June 30, 2007 (year-on-year comparisons with previous corresponding period)-
Favourable Changes: total revenue up 619.2% to $A36,581 ($US28,859); total liabilities to total assets down 77.1% to 0.1; current ratio up 410.3% to 13.0; NTA per share up 100.0% to $A0.0 (1.7c).
Unfavourable Changes: loss of $A1.1m ($US839,598); EPS deterioration 615.8 to $A-0.0 (-1.1c); losses in all of the last 5 years; operating cash flow is negative; total number of shares outstanding up 478.9% to 78,334,489.
Major Common Size Ratios: total current assets to total assets up from 56.6% to 67.1%; cash to total assets up from 56.6% to 64.6%; profit before tax to revenues down from -1,825.7% to -2,909.3%; profit after tax to revenues down from -1,825.7% to -2,909.3%.

FUNDAMENTALS
P/S: The price/sales ratio is 599.6.
Price to Cash: The price to cash backing per share is 12.9.

ISSUED CAPITAL
Based on 70,880,217 issued shares the market capitalisation is $20 million.

ACTIVITIES
Resource exploration & investment in Australia & resource exploration in USA.

TOP MANAGEMENT
The Director is Andy Dewhurst

BUSINESS NEWS ROUND UP
The last 5 snippets from News Bites were:
May 12: Eromanga Hydrocarbons: second prospect identified in Block 430
Eromanga Hydrocarbons NL advised a second prospect in Block 430 has been identified by the Gavea joint venture (40%) in Sergipe-Alagoas Basin, Brazil.The new prospect is 4 km east southeast of the joint venture well 1-NORD-1-SE where drilling has been underway since 7 April.The principal reservoir objectives for this second prospect would be the pre-Calumbi, Apto-Albian arenites and carbonates of the Muribeca and Riachuelo Fms, with secondary targets in the Calumbi turbidite sands and potentially fractured basement.

April 08: Eromanga Hydrocarbons directors buy options
Eromanga Hydrocarbons NL directors bought options on-market on April 3, 2008.Philip Galloway bought 1,000,000 options. He holds 2,141,093 shares, 6,500,000 options, 3,000,000 performance rights and 513,500 partly paid shares.Michael Goldhirsch bought 300,000 options. He holds 3,105,441 shares, 9,025,000 options and 2,500,000 performance rights.Joshua Goldhirsch bought 363,948 options.

March 30: Eromanga Hydrocarbons strikes oil in first Brazil well
Eromanga Hydrocarbons NL announced the operator has completed PTA-3 in Block 330, Sergipe Alagoas Basin, Brazil, for production.Operator Gavea estimates that PTA-3 will produce between 60 and 100 barrels per day of 15 degree API grade oil. A pay zone of 15m was confirmed by swab testing.

February 18: Eromanga encounters oil at Sergipe Alagoas
Eromanga Hydrocarbons NL has encountered a gas kick and an oil inflow at its PTA 3 well in the Sergipe Alagoas basin, offshore Brazil. Re-entry operations experienced the gas kick at 171m, while oil was encountered at a depth of 295m. A new bridge plug will be placed at 605m prior to completion of the well at 660m.

February 15: Eromanga drilling in Sergipe Alagoas Basin, Brazil
Eromanga Hydrocarbons Ltd started drilling its PTA 3 discovery well in Block 330 in the Sergipe Alagoas Basin, Brazil on February 15, 2008. Eromanga said drilling reached 70 metres deep and a five metre plug was drilled out from 20 metres. The drilling was running back into the well through 13 5/8 inch casing.

Currency Conversion: Australian Dollar AUD 1 = US$ 0.9343 [or US$1=AUD 1.07]; Against the US$ the AUD fell 55.35 basis points (or 0.6%) for the day; declined 0.8% for the week; strengthened 0.2% for the month; soared 24.0% in the past year.


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