macquarie likes tap - values at $1.35

Thanks to Nipper from that other site !

...The current share price is merely reflecting the cash position and 3rd party gas contracts and discounting TAP's producing assets, development opportunities and exploration potential. Nonetheless, TAP is due to sanction Manora by mid-2012, will commence drilling of the 1.3tcf Tallaganda prospect in WA-351-P in February and is expected to farm-down its interests in offshore Ghana this year. Meanwhile a resolution to the Burrup litigation appears to be on the horizon.

- The Atwood Eagle is expected to commence drilling of the 0.3-1.3tcf (P90-P10) Tallaganda prospect in late February 2012. Success here could potentially add 26Acps to our NAV and partly de-risk the 2-3tcf of total prospective resources estimated within WA-351-P. BHPB recently farmed down a 25% stake in the block to Apache, suggesting building industry interest.

- Over the last 6 months the potential for litigation from the Burrup receivers appears to have diminished. Following Apache emerging as the successful bidder for a 65% interest in Burrup Holdings in late December, Yara International pre-empted on a 16% stake, giving it a controlling 51% interest in Burrup Holdings. While Apache now holds a 49% minority interest a revised gas supply contract between Burrup Fertilisers and Apache was agreed upon in November 2011.

- With A$82m of cash on hand, no debt and a further A$21.7m yet to be received from the sale of Finucane/Fletcher, TAP retains a strong balance sheet. That said much of the strength has been achieved through asset sales rather than operational performance. Given TAP is seeking to divest its 10% interest in WA-290-P, including the Zola discovery this trend looks set to continue. With Manora due to be sanctioned mid-year, it appears TAP is well placed to fund its ~U$70m share of development costs and capex carry.