from iress: dj newswire on shale gas, page-11

The main reason I am invested in the Small/ mid cap Oil & gas sector ( mainly beach energy) is because I do believe this sector is really undervalued. Most of the companies I have looked have little or no debt and very strong cash flow at these sorts of oil prices. The problem/risk with these stocks is that it is becoming more difficult and expensive to renew there reserves to keep production growing or at it's current levels.

I'm actually surprised that someone has not come in and mopped up a few of these minors to tap there cash flows and cut there exploration costs to maximise there profitability and get a payback on there investment with in 2-4 years, to create a cash cow - maybe I am missing something here.

The point is that even without the Shale gas potential beach has there share price is well supported from there production cashflow and they have no debt to boot. They are in a strong position to capitalise on what comes there way eg. shale gas. It is hard not to get excited about a stock that has such a strong balance sheet. I would hate for them at this stage to do a capital raising to fund any shale gas development as this would just dilute the current shareholders position, I don't think this will happen and they have the debt Facility with the Commonwealth bank, so I think we are sitting pretty.