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QUOTE (sook @ Thursday 11/09/08 12:48pm)

Hi Sook,

 

You are correct that ROC benefits when the oil price goes up.

 

At current oil price, they will be reporting a substantial profit (getting part of previous losses back) from the hedged posiiton.

 

The real issue is the Duri-Brent discount. As it widens, ROC loses extra $s, as it narrows, ROC gets the $s back.

 

Hi 2Bs, Nohoper,

 

It certainly looks like ROC is bottoming, and that it appears cheap based on fundamentals. However, even if things go reasonably well, it may stay cheap. It may not go lower, but it may not recover that much either in the short to medium term = missed opportunity cost.

 

There is produciton risk at Zhoa Dong (all fields) and BGM, and to other production to a lesser extent.

 

Having said that, I suspect that there is little downside from an Arroz duster due to now low Angola expectations. This may give an opportunity to have a low cost punt on the Arroz result. We have no indication of size of Arroz, so we have no idea of the impact. From a recent presentation, Arroz looks like it is a similar play type to Coco = pre-salt carbonate play versus the pre-salt Lucula sand play type of the previous duster pre-salt wells. ROC hasn't explicitly given any information, but I am adding 1 and 1 from sketchy information. Have drawn an incorrrect conclusion. Probalby not that relevant really.

 

In the interim, other factors could push the share price either way: 6-12 FID, quarterly production, Massambala (minor?).

 

The question, is ROC the best bet in the market?

 

Cheers,

Mosaic

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In reply to: mosaic1996 on Thursday 11/09/08 02:10pm

Yes with a market cap of $650mil it's going to be much tougher to move the sp even when BG FID is announced within the next couple of months and AZA s'holders will start getting their ROC shares from 22Sep which is bound to put pressure on the sp.

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In reply to: mosaic1996 on Thursday 11/09/08 02:10pm

M,

 

I'll be honest. I don't monitor oil stock the way you do. I believe in terms of fundamental knowledge and analysis you guys are way ahead of me. Of the 4 stocks that I am watching now - AWE, TAP, BPT and ROC (there were other oil minors but I have dropped most of them for the time being), I think ROC is the one that is showing sign of stabilising. Although it is still in early day, it is faring slightly better than the others at the moment. Based on my past observation I have to say I am not that impressed with the ROC management due to their lack of transparency. On top of that my observation on the stock price movement "seems" (meaning guesswork) to indicate there were always some kind of stock movement prior to important announcement - which can be to your advantage if you can pick that up ahead of others.

 

Other than that I think AWE probably is the better one amongst the four. BPT and ROC, from memory I think they do have substantial debt, which could be a problem moving forward.

 

 

Cheers.

 

ps: I think oil price might go down to as low as 95 before attempting a rebound, but I could be wrong at this point. The current down trend has the smell of an engineered shake out in this sector, the target as usual, the small retail holders. This is my current pet theory on this group because when oil was trading at 75, they were doing very well. Now with oil trading at 101, they should be doing better, but their stock price doesn't reflect that fact. Don't make a lot of sense to me unless they are all "captives" of OPES fallout.

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In reply to: nohoper on Friday 12/09/08 05:15pm

QUOTE
stock price movement "seems" (meaning guesswork) to indicate there were always some kind of stock movement prior to important announcement

 

 

Hi nohoper,

The ROC sp is jumping all over the place a.t.m. so it is hard to pick a trend.

Couple of things that I have noticed recently :-

- higher than normal volume albeit with the AZA deal looming

- a significant fall in the asx short sold volume to greater than 3 million a week ago (just about a historic high) to less than a million currently.

http://www.asx.com.au/data/Shortsell.txt

 

maybe the "shorters' have moved on to TAP !!!

 

Still got some great fundamentals including management IMHO and will be a stock which is quick to rebound on better overall market sentiment and / or rising oil price.

 

I had hoped that Angola would be JD's legacy (and it may still be) but the Anzon deal may achieve that in the fullness of time.

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QUOTE (starplus @ Friday 12/09/08 05:56pm)

Hi SP,

 

QUOTE
a significant fall in the asx short sold volume to greater than 3 million a week ago (just about a historic high) to less than a million currently.

I suspect that most of the short interest was/is to do with an arbitrage opportunity between AZA/AEL and ROC: long AZA, short ROC When I was monitoring early on, AZA was trading at a substantial discount [5% plus] to the implied offer price. I stopped monitoring after a few weeks, so I am not sure if the gap closed.

 

Cheers,

Mosaic

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In reply to: starplus on Friday 12/09/08 06:56pm

SP,

 

I think currently the oil group is really weak due to the weakness in oil price. There isn't a lot of market interest in this group, in a way making all short term chart observation and TA quite meaningless. ROC may be under more selling pressure, best keep away from all these stocks for the time being.

 

Cheers.

post-16-1221266117.jpg

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In reply to: nohoper on Saturday 13/09/08 10:35am

Hi nohoper,

I have some passing knowledge of t.a. but for the life of me cannot see how that chart points to a forward price of 92 cents - if indeed that is your intention.

 

The price seems to have stabilized over the past month, notwithstanding the fall in the oil price.

 

There could be some selling pressure as the AZA shareholders get stock but I would have thought that those who wanted out have had plenty of time (at much better prices) and those that are left are here for the longer term.

 

I am waiting patiently for a breakout to the upside when it could be a great CFD 'long' opportunity !

 

P.S. interesting to see Clements speculate on the Mauritania holding - saying that they don't really need the money but it does raise the question of would they consider an offer. It will never be a 'core' holding and the potential funds could be far better used in China, WA 351P etc. etc. Time to let it go, maybe ?

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In reply to: nohoper on Saturday 13/09/08 10:35am

QUOTE
I think currently the oil group is really weak due to the weakness in oil price

 

I think you are right in that statement , moreso in some stocks than others.

Isnt it odd how perceptions change.Also how SP's rise further into rises prices and some fall in a heap on the way down even though the oil price is still spectacular.

 

A couple of years ago anyone using 100 dollar oil and using weakness in the same sentence would have been institutionalised.

 

cheers.

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In reply to: balance on Monday 15/09/08 09:01am

B,

 

Futures went down to 99 this morning due to "no big damage" by hurricane Ike... this is one sign that the speculators are running scare. This will take time for them to regroup which I think they will given the current prevalent bad news in the financial and economic fronts.

 

Cheers.

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