That should read good downside protection

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Autosime

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15/09/15

21:33

Post #: 15998707
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Originally posted by Autosime ↑

Anything possible Atomic but you will find that DLS would be profitable - albeit marginally even if oil was 30 dollars and the AUD 70. The realised price of gas was marginally up year and year , as DLS transitions into more gas then that will provide another insulator. The difference is gas supply and demand in Australia has unique levers - we know there will be a shortage of gas to go the domestic economy, and prices will rise significantly as the LNG exports start from the big projects this quarter.
The sector is out of favour , and all stocks get punished, the secret is to pick stocks that have robust upside to a recovery but also good downside. I have looked at many oilers. I like CB oilers as they are easy to value , , their production is spread across many fields so little risk in reserve downgrades, they are on shore so no chance for environmental catastrophe and the reserve replacement is not onerous and can be ramp up or down easily. Each well may cost a couple of million so very easy to manage. Now of all the CB stocks I like Dls the best as EV per barrel of oil equivalent it is the cheapest CB stock, it has more oil than gas than beach they even cheaper and it has a fair bit of free Carrier exploration. It also has the best hedging of the 4 Cb producers. If you compare SXY to DLS you will find SXY oil reserves are very low, come from fields with lower flow rates and therefore will rise much longer to extract . I like Beach but they are not as cheap as DLS and less of a corporate target. DLS may go lower , but at these levels it trades on a LT oil price of less than 50. It actually trades not far from spot, so I am happy to hold if it falls but I think it is more likely to be higher in 6 months than today

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That should read good downside protection

DLS Price at posting: 48.5¢ Sentiment: Buy Disclosure: Held
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That should read good downside protection

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