Ann: Quarterly Activities Report, page-11

Bit of commentary from MAQ after the qrtly...

Macquarie rates SXY as Outperform (1) -The December quarter was weak but Macquarie believes the second half should be stronger as horizontal wells come on line, and the earnings miss is immaterial in the scope of future earnings.The broker believes the market has oversold the stock. Project Atlas, which makes up the majority of valuation, is uncontracted and Macquarie expects to hear news regarding the contracting of gas sales and its drilling rig in the near term.The broker suggests this should de-link the company from its oil-price proxy, as volumes are expected to be CPI-linked. Outperform rating and $0.50 target maintained.