fin review article , page-2

Ok - either UBS have a crystal ball or UBS report is wrong or misquoted and relates to WA vs Ghana

Trevor Hoey
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TAP

TAP OIL FPO (TAP)

$0.545
$0.03
(4.81%)

Volume 478442 Value 256821.0

5 Year
1 Day

as at 16:10 Australia/Sydney 04 JUL 2013

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Company Profile
Oil and gas production and exploration.
http://www.tapoil.com.au/
Oil, Gas & Consumable Fuels (101020)
ASIC 068572341
ASX Announcements
03/07/13 Starfish-1 Exploration Well - Drilling Update
02/07/13 Bianchi-1 Well - Drilling Update
28/06/13 Bianchi-1 Well - Drilling Update
26/06/13 Starfish-1 Exploration Well - Drilling Update
25/06/13 Taunton-5/5H Well - Final Drilling Update

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Analysis
Financials

UBS recently increased Tap Oil’s earnings per share forecast for 2013-14 and 2014-15 and upgraded its recommendation from “neutral” to “buy” as the broker reassessed the potential upside from Tap’s recent exploration success in Ghana.

Earnings per share forecasts for 2013-14 were increased by about 22 per cent to 14.2¢, and substantial growth is expected in 2014-15 with UBS now expecting earnings per share of 22.6¢. This represents a price-earnings multiple of 2.2 relative to UBS’s 12-month price target of 51¢.

The main catalyst for this rerating has been promising drilling results from its offshore Accra project, east of Ghana. Tap has a 17.5 per cent interest in the Starfish-1 exploration well, which is targeting a deepwater resource the company believes is potentially comparable to the prolific Jubilee oilfield that is in reasonably close proximity to the Accra acreage.

Tap estimates the resource could be as large as half a billion barrels, and while UBS acknowledges this is a high-risk project the rewards could be substantial. UBS calculates that a successful drilling program could be worth up to $2.75 per barrel.

In the interim Tap’s Manora oilfield development in Thailand is on track to commence production in 2014. It has an economic field life in the vicinity of 11 years, and is expected to produce 15,000 barrels of oil a day, of which 30 per cent is attributable to Tap.