wpl and jbm broker targets

Good Morning,

Morning update for 21/6/2006:

US Market Wrap

U.S. blue-chip stocks rose on Tuesday, led by gains in Caterpillar Inc., as stronger-than-expected housing data eased concerns about an economic slowdown. But the Nasdaq Composite Index ended slightly lower, hurt by declines in the shares of small pharmaceutical and biotechnology companies. The Commerce Department said U.S. housing starts in May rose faster than economists forecast, but permits for future projects declined. The Dow Jones industrial average rose 32.73 points, or +0.30%, to end at 10,974.84. The Standard & Poor's 500 Index inched down just 0.02 of a point, or unchanged on a percentage basis, at 1,240.12. The Nasdaq Composite Index slipped 3.36 points, or -0.16%, to close at 2,107.06.

Key Buy Ideas for 21/6/2006:
Jubilee Mines NL - Sinclair discovery to underpin sustainability & expansion at Cosmos
Woodside Petroleum Ltd - Despite short-term production issues, long-term production growth remains attractive
Stock Reviews

Jubilee Mines NL (ASX Code : JBM) - Rating : Buy 2/Current Price : $6.82/Price Target : $7.78

JBM has confirmed a significant new nickel sulphide discovery at the 100% owned Sinclair prospect, at the Bannockburn project, just 100 kilometres south of the flagship Cosmos operation, in WA. In light of the recent results at the ‘satellite’ Sinclair deposit, and the probability of further drilling success, we are increasingly confident that the total Cosmos Ni production can be lifted to the 20,000t Ni pa level, on a sustainable basis. However, there remains some uncertainty on the timing of an expansion at Cosmos, with the challenges of bringing onstream production from Tapinos, Prospero & Sinclair sequentially during FY07, FY08 & FY09 respectively. We maintain our Buy 2 recommendation with the firm view that Jubilee is the premier place to be for Ni exposure, now underpinned by a sustainable earnings stream. In light of the strong drilling results at the Sinclair prospect and an increasingly positive outlook for the nickel market we have lifted our assessed value to $6.48 and set a new 12 month target at $7.78 (using a 20% premium to assessed value). Furthermore, we are lifting our earnings estimate for FY06 to $74.2M (from $63.4M) to take into account the continued strength of the nickel price that we have experienced during 2H06.

Woodside Petroleum Ltd (ASX Code : WPL) - Rating : Buy 1/Current Price : $40.95/Price Target : $46.84

WPL has cut its 2006 production outlook by 5% to 72 million barrels of oil equivalent (boe), blaming mainly start-up delays and bad weather. In our most recent WPL research note (15/6/2006) it was noted there may be a risk to 2006 production on the back of Chinguetti production problems and a one month delay to the early start up of the Enfield oil project. Despite our reduced outlook, we think the potential growth over 2006 still represents a very healthy year on year production gain from 2005. We also continue to find Woodside’s longer term outlook compelling. At Woodside’s Annual General Meeting in Perth on 11 April 2006, Woodside stated that it expects it’s production to reach around 115 mmboe by 2009. This represents almost a 100% increase on the 2005 level of production delivered by the company. We think this may be conservative, and subject to successful future project delivery we forecast Woodside’s production to reach 117 mmboe by 2008. We rate Woodside as one of Australia’s best long term resource sector investments, due to its high quality asset base which has potential to support an exceptional forward growth profile. Our Woodside share price target is A$46.84 (unchanged). This is based on our 12- month forward DCF valuation, significant static gas resources and exploration upside potential. Applying the oil futures curve results in a 24% uplift to our valuation and a 13% to 18% increase in our EPS forecasts to 2008E. Any further share price weakness on the back of the production downgrade presents a compelling buying opportunity.