Hi Folks Firstly let me say I am looking at entering atound...

Hi Folks
Firstly let me say I am looking at entering atound these levels , however the reality it at current Poo DLS is priced about right. The problem DLS face is they will pump out a good proportion of their oil reserves as the worst time , so even if Oil price recovers , the production profile will be much lower . In an effort to maintain cash flows they have reduced capex which means reserve replacement near impossible

As for Bigals argument , the only part I disagree with is the reserve prodiction profile have a much longer tail so the last 35_40% of reserves will trickle out over 6-8 years .

The other part about a corporate play is stokes may be looking at a merger which may be done on a Nil premium basis so you may not see a TO in the traditional sense .

Lastly - at present many companies of good assets on the market so it's a buyers market , and the buyers are generally cash strapped and not willing to pay too much for these assets

Having said all that I think DLS is a fair bet at these levels but simply on the view medium term oil price will be 60-70 and Aud will stay low

It's important to not until recently many DLS broker vacations are based on higher LT oil prices , these are currently being revised down which will see big changes to valuations . I know of one broking firm currently revising dLS price target down - now in 90s soon to go much lower