Seriously, how long will AQO keep trading around the 20c range?
The real value of the Cooper basin was again demonstrated yesterday with Origins farm in with SXY.
IMO we wont see AQO at 20c or thereabouts for too much longer.
AQO should be churning at around the 30c-40c range purely based on the acreage it hold in the Cooper. And I haven't even taken into account the deal done with Hunter last year. (More behind all this deal than meets the eye IMO)
Beach bounce, gas venture add to Cooper Basin fervour PAUL GARVEY THE AUSTRALIAN FEBRUARY 25, 2014 12:00AM
THE rebirth of the Cooper Basin has continued: a strong jump in earnings out of Beach Energy and a new $252 million joint venture between Senex Energy and Origin Energy have added to the growing excitement around the province.
Shares in Beach climbed to their highest level in almost two years after it more than tripled its first-half profit to $160.5m yesterday. And the 9 per cent increase in first-half net profit to $31.8m at Senex Energy was overshadowed by the announcement of the company's new partnership with Origin Energy.
Origin will spend up to $252m to earn between 40 per cent and 50 per cent of two areas of the Cooper Basin said to have strong potential for unconventional oil and gas. The rise of so-called unconventional oil and gas has helped reinvigorate a Cooper Basin that until recently was thought to be in decline.
Beach Energy has already struck a deal with Chevron, in which the US energy giant will spend $349m testing the unconventional potential of two of Beach's Cooper Basin permits.
Beach managing director Reg Nelson attributed the company's surge in earnings to a big increase in oil production out of the basin's Western Flank region, as well as higher realised oil prices and favourable currency movements.
The company announced it would pay a 1c a share interim dividend and a 1c a share special dividend, compared to a 0.75c a share interim dividend paid last year.
"When we first started to drill on the Western Flank back in the early 2000s, people said we were mad and it was all clapped out. We've since seen the resurgence, and Beach is now the largest onshore oil producer in Australia," Mr Nelson said.
He said Beach and several large international players continued to eye acquisition opportunities in the basin in anticipation of rising gas prices in eastern Australia.
"Our unconventional gas program indicates there's a huge gas resource there. The question is whether you can tap into it and develop it commercially, but the prize is great," he said.
Senex managing director Ian Davies said there had been a lot of third-party interest in the company's unconventional acreage, but it had opted to partner with Origin due to its extensive eastern Australia utilities business.
"The risk of doing a deal with a super-major is that they prove up this great resource and then sit on it for 10 years.
"I have absolutely no interest in doing that, which is why Origin was very, very compelling," he said.
"Where the value is realised in these sorts of deals is in getting the gas out of the ground and into market.
"I wanted to be aligned with a partner who is absolutely on the same track of getting the gas into a market, and no one has a better position in the east coast (gas market) than Origin."
Shares in Beach closed up 13.5c to $1.66, Senex gained 2c to 78.5c and Origin was up 2c to $14.56.
AQO Price at posting:
20.0¢ Sentiment: ST Buy Disclosure: Held
