well...that was fun

I've researched BUY for 10+ hours.
The following is offered for discussion OR correction.
It's a bit long - but thats BUY's fault

First point
My endpoint is not all negative- but there are a few humps along the way.
Research was made harder by BUY's reporting standards.
They are crap.
1. Constantly quoting P10's as the only info on a target is total bs. (P10 = 10% chance of success)
The standard should be to quote all three - p10 / p50 & p90
Obviously anyone can see why the p10 is nonsense.
2. To the board - if its not too hard - can you get the dates on the title page of your quarterly reports dated correctly?
Refer to:
http://imagesignal.comsec.com.au/asxdata/20090501/pdf/00949507.pdf
I know its a small point - but when you have 20 screens open - this makes it confusing.
3. On their website they have-
"It is listed on the Australian Stock Exchange with the enviable code of "BUY"."
Thats awesome, thanks to the board for that.
Good to see you leading with the best fact possible.
NOT

Summary
BUY is a 19million dollar company with enough permits to trouble BHP's capex. (I know this is an exaggeration)
They are out of their depth with a lot of them.

Bonarparte Basin
Long distance / High CO2 play.
Fairly complicated and BUY is struggling with PEP11 which is much simpler
PEP11 is the play and their methods developing this demonstrate for me that Bonarparte is too hard.
ALSO NOTE: This thing is no where near Browse Basin in terms of comparing. ie- KAR
It is similar to MEO - except MEO are specialising in this type of play

Tanzania
Tanzania is a reasonable country to invest in.
refer to RESOURCE STOCKS 2008 country risk index
Tanzania = 13.3
This put them in the best third of producers
(NZ=11.6 Brazil=11.9 Russia=16.0 Zimbabwe 24.6)
But again- this play is too unresearched for me to jump over hoops

AC/P32
controlled by Thailand company
BUY increased from 10% to 15% for very little
Screams going nowhere very fast
Again nothing to do with Browse Basin

Canarvon Basin
small and who cares when comparing to PEP11

Surat Basin
If I wanted to invest in CSG - this is one of the last company's I would come to.

Cooper Eromanga Basin
Earning $400k per year - who cares
potential to earn x3 this - who cares

SUMMARY
Very complicated company which I believe quite simply totally hinges on PEP11.

PEP11
If PEP11 yields 16tcf and $12billion NPV10 - I'll vote labour.
[it is positive they quoted the discount rate which often doesn't happen. ie 10%. This means if you spend $12billion to buy once proven - you get a 10% return. The downside is 10% is low for exploration and should be 15% - if you adjust this figure the npv drops approx 50%. Even 12% discount rate effects it buy approx 20%)
Other issues with their NPV is
mcf rate - $7 very generous for the eastern seaboard
well flow rate - 30mmcfd
Thats huge - possible - but huge.
Those coming from LKO's 1.3mmcfd will understand how big that is
Lower rate will mean not only less reservoir, but also much slower cash flow.
Well cost $22million aud - again very cheap. I believe they have given you the "no contingencies" rate. This will tend to disappoint in offshore drilling

But it doesn't need to get 16tcf to be huge.
Again, the 16tcf is p10 or 10% probability.
The more pertinent info is how much per well
I found BUY quoting 0.2-2.0 tcf
With well cost $22million dollars you can see why well result is important to the actual NPV

The other BIG factor is BUY is carried for only 1 well.
1 well is worth as much as the market cap for BUY.
BUY has given up 60% WI for one well
leaving 15% WI
If that first well doesn't work, they haven't got much to play with afterwards. They'll need $3.3million even at 15% for the next well. (Assuming MEC will agree to the other 85%)

For me - BUY is rolling the dice on one play and its coming up soon.

That makes it interesting.

Bring on the first drill at PEP11

Don't shoot me for ignoring the other plays - PEP11 is so big - BUY won't need them if it comes off.

Conclusion
Very high risk - Very high return
Worth putting your hand in - perhaps 5% to 10% of portfolio

Lastly,
Don't hate the board - Don't particurlarly like them though.