Drillsearch makes its move THE other 3D -- 3D Oil (TDO) -- was...

Drillsearch makes its move

THE other 3D -- 3D Oil (TDO) -- was also in the news after Drillsearch (DLS) made a hostile lunge. It says it has already done a deal with 25 shareholders and holds 19.9 per cent of the target company and will proceed with an off-market takeover. However, 3D managing director Noel Newell has 18 per cent of the company in his own name and says the paper offer is insufficient. He says he will not accept it, although does qualify that stand as his "present intention".

Drillsearch would, if it succeeded, pick up 3D's emerging resource in the Gippsland Basin as well as the $12 million it has in the bank. The cash may be the more attractive of the two given the challenges of raising or borrowing money in this climate.

Mixed recommendations elsewhere in the oil sector.

Hartleys has put a "buy" on Oilex (OEX). It concedes that Oilex has been hammered by cost over-runs, delays and problems with foreign exchange rates but sees it, after having raised money, as being well placed to ride out the storm and have positive cash flow by the end of the year.

But Stock Resource has stuck a "sell" at $1 on AED Oil (AED) (it closed at 98.5c on Friday). The report said the latest appraisal drilling of the Puffin oil field had produced a poor result and Stock Resource says there are better investments in the oil sector.

http://www.theaustralian.news.com.au/business/story/0,28124,24928831-5005200,00.html