OK oiler followers, the challenge is to pick the next big winner. In the last two to three years the success stories have been HDR, AYO, ARQ, and PSA. These have all risen several mutiples from their pre oil/gas discovery lows. What they have in common is what you would expect, success with the drill bit, HDR with Chinguetti, Arc Energy with Hovea, Amity with Gocerler (and now Ad and Ca) and Petsec with West Cameron. ECU has also had a great run this past year.
So what about 2003/4. We are looking for an oiler say currently price from 1 to 40 cents that has the potential to join the above group as a several bagger. It will have to be on the back of drilling success as that is what has propelled the marker group to current heights. Best that it not have too many shares on issue and that it has a good range of leases. It would help if it had some producing assets to help fund exploration.
My short list would be Beach Petroleum which has already got an under valued excellent cash flow, active drilling program and one hit already to its credit this drilling round. Downside is the small, not particularly exciting, targets in the Cooper/Eromanga basin. But at least two bagger potential this year on basis of current cash flow alone.
Second choice would be Bounty (I hold), good spread of assets including onshore and offshore Perth Basin, gas revenues from Woodada, bolt hole for HDR execs if Woodside moves on Hardman. If Leafcutter comes in with 16 mmbls recoverable could be at least a three to four bagger. But won't be crippled by Leafcutter duster.
Two rank outsiders would be Icon and Sun Rsources. The former solely on the strength of its Bayou Choctaw holdings. If it can get drilling started again there Icon could be a big winner this year. Would have preferred to say Far, as I hold, but can't see anything particularly exciting coming up for this one in the near future though it too has a small interest in Bayou Choctaw and of course China.
Sun Resources has that interest in Kilauea currently being drilled, not a lot of scrip on issue (<100k) and money in the bank. It has a few other dodgey leases and some poor cousins as partners but success this week at Kilauea could do wonders for the stock.
So there we have it, my tips are BPT, BUY and long shots ICN and SUR. What are yours?
