Last night I decided to review some of the other Small Cap plays...

Last night I decided to review some of the other Small Cap plays in the energy sector (the ones with the largest market cap, shown below).



Based on my review, SXY stands out as the best pick (in terms of its 2P reserves), followed by SEA.
COE is also interesting, it has half our reserves, but plans to achieve a higher rate of production, and is also exploring other areas.

The rest were mainly explorers (which I classify as higher risk – yes, one may take off, but how many won’t find anything).

PDN was probably the only exception – it has shut down all operations, but the price of uranium is starting to increase.

Basically, I have affirmed my view that SXY is still the pick (and where my money is and needs to remain). The reason the share price hasn’t gone anywhere this year, is because SXY hasn’t exactly made any progress (in terms of what it said it would achieve by way of further wells and production). Having said this, we have certainly got all our ducks lined up for a stepped change in earnings and production toward the 4mmboe that ID alluded to (plus more if successful, as the projects are being setup with the ability to expand the modular processing plants).

Whilst we wait for drilling of our next Surat Basin wells next quarter, there could hopefully be some short term catalysts:

• Success from the BPT free-carry 10 wells that are currently being drilled on the Western Flank
• Reserve upgrades (something ID mentioned may happen by end of year – this would make us even more attractive)
• News that Ironbark has been acquired by a party other than SXY (or SXY has acquired around $100M-$140M).

Patience is needed, and as long as ID delivers his plan, I think we could all be very happy come this time next year, and thereafter.