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OIL - OPTISCAN IMAGING LIMITED


theflasherman

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Oil Prices remain strong overnight. Currently at US$34.80 on Nymex. A$ is at 0.7782 giving a A$ price for oil of $44.72. At this level Australian oil producers should be making plenty of cash. TAP, AMU, COE, STU and ARQ would be my pick of the smaller companies. Of the larger OSH.

 

I think as winter thaws we could see oil prices return back down to US$28 a barrel at the top end of OPEC's preferred range. I doubt we will see below that given US dollar weakness is eating into returns to OPEC members. However, at this level it will erode Australian producer returns substantially.

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IN REPLY TO A POST BY theflasherman, Tue 13/01/04 05:56am   [READ POST]

Oil Prices remain strong overnight. Currently at US$34.80 on Nymex. A$ is at 0.7782 giving a A$ price for oil of $44.72. At this level Australian oil producers should be making plenty of cash. TAP, AMU, COE, STU and ARQ would be my pick of the smaller companies. Of the larger OSH.

I think as winter thaws we could see oil prices return back down to US$28 a barrel at the top end of OPEC's preferred range. I doubt we will see below that given US dollar weakness is eating into returns to OPEC members. However, at this level it will erode Australian producer returns substantially.

Flasherman, any opinions on BSO, given current and predicted oil prices?

Currently on a p/e of 6.5 and a yield of 16%.

Most recent distribution was paid today, next one due in July.

 

I'm looking at a six-month yield-play, possibly rolling it over, depending on where oil prices are in the second half.

 

Anything I need to know?

 

 

~Amongst the junior oilers, I'm happily holding COEOs, and hanging on to BPT with fluctuating degrees of frustration~

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IN REPLY TO A POST BY Mrs Brown, Thursday 15/01/04 04:39am   [READ POST]


Flasherman, any opinions on BSO, given current and predicted oil prices?
Currently on a p/e of 6.5 and a yield of 16%.
Most recent distribution was paid today, next one due in July.

I'm looking at a six-month yield-play, possibly rolling it over, depending on where oil prices are in the second half.

Anything I need to know?


~Amongst the junior oilers, I'm happily holding COEOs, and hanging on to BPT with fluctuating degrees of frustration~

Hi MB

 

I don't follow BSO but as I understand the company its income is from a royalty from fields in the Bass Strait. The following is a basic profile I have on it:

 

"ACTIVITY

The principal activity of the Trust is its interest in the Weeks Royalty which includes an entitlement to 55.1% of royalty payments currently made by BHP and Esso under the terms of a 2.5% overriding royalty, known as the Bass Strait Royalty, on the gross value of all hydrocarbons produced and recovered from designated areas in Bass Strait."

 

I also have some history if you are interested.

 

I guess the rates of production and the oil price are key for that one. The yield may look very good but one thing to look out for is the life of the fields. A 16%+ yield looks good but is not very good if in 5 years time (for illustration only as I don't know the life of the fields) the fields run out and there is no more royalty income.

 

I've got quite a few COEO's as well as COE. It was trending nicely but the weakness in the oil price last night seems to have taken the wind out of its sails. I'll have to start getting things in order to exercise the COEO's as they don't look like they will trade where they should due to the overhang from over-extended punters.

 

Hope this helps!

 

 

 

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IN REPLY TO A POST BY theflasherman, Fri 16/01/04 11:42am   [READ POST]

Hi MB

I don't follow BSO but as I understand the company its income is from a royalty from fields in the Bass Strait. The following is a basic profile I have on it:

"ACTIVITY
The principal activity of the Trust is its interest in the Weeks Royalty which includes an entitlement to 55.1% of royalty payments currently made by BHP and Esso under the terms of a 2.5% overriding royalty, known as the Bass Strait Royalty, on the gross value of all hydrocarbons produced and recovered from designated areas in Bass Strait."

I also have some history if you are interested.

I guess the rates of production and the oil price are key for that one. The yield may look very good but one thing to look out for is the life of the fields. A 16%+ yield looks good but is not very good if in 5 years time (for illustration only as I don't know the life of the fields) the fields run out and there is no more royalty income.

I've got quite a few COEO's as well as COE. It was trending nicely but the weakness in the oil price last night seems to have taken the wind out of its sails. I'll have to start getting things in order to exercise the COEO's as they don't look like they will trade where they should due to the overhang from over-extended punters.

Hope this helps!

Thanks for your help, Flash

 

I'm also planning to exercise my COEOs- pleased to see a generally upward trend, but still surprised at the size of the discount to the underlying share. I'm new to oil, but from what I've been reading, it certainly looks like there's good upside in COE- without even thinking about a possible pipeline out of Worrior, or this year's drilling. But I can't see the price where I want it before the last week of March.

 

On BSO's future: the trust expires in 2007, but you're right- I should look more closely at how much oil is left in those fields when planning my exit strategy.

 

Cheers

Mrs B

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Oil now over US$36 ... Saudi's upping the price as USD falls to maintain their return???

 

Perhaps they may demand payment in something other than US dollars soon???

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Hi brettan

 

I would say neither ROC or HZN will benefit by the current high oil prices as ROC is almost entirely a gas producer and HZN doesn't have much either relative to the other projects going on. However, for different reasons I believe both are strong buys due to upcoming drilling programs. The choice of which depends on how much risk you want to take. For myself I prefer ROC as I believe that preservation of capital is more paramount. It is much harder to make back a lost $1 than make a new one.

 

IMO candidates which will benefit the most, are reasonably leveraged and not too diversified are OSH, COE, AMU, STU, BPT, TAP. Personally I have OSH, TAP, COE and ROC but am heavily overweight ROC as of last week.

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