Thank you B2 but I have now moved on. They are pumping out the...

Thank you B2 but I have now moved on. They are pumping out the oil at an impressive rate but not finding much to replace it-only faster field recoveries rather than fresh field discoveries.

On this point Timo, at one of his roadshows late last year, highlighted the need to replace your oil reserves and add to each year-they have not done this over the past twelve months. ie exploration unsuccessful.

The management is first rate but what that suggests to me when Santos was forced to relinquish a large portion of the basin, they prioritised many oil targets of those left behind. Most of those have now been drilled with the best ones generating success, and the lesser ranked now proving dusters.

Unless there is a new model capable of generating fresh oil targets coupled with success, the attraction of oil to me in the Cooper is fast fading.

The gas argument is another question and the drilling in the second half could commence a rennaisance for the independent gas producers away from the clutches of Santos by tapping directly into alternate pipes. This will come at a cost both in terms of capital and penalties given the likely quality of gas to be delivered.(Go to their tenement maps and look at the SE corner. Note the potential gas targets and the pipeline nearby.)

If you are comfortable with a gas story as opposed to oil, the stock has significant speculative appeal. I personally do not rate wild catting for gas that highly and am more comfortable with AWE and ORG (yes boring stocks) on this front.

Does it represent reasonable value on what is known?. Probably.

Cheers,TAS