Why the wait

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Drillsearch Energy has long been linked to a merger with Beach Energy.
Credit Suisse analysts don't know why Beach Energy hasn't launched a merger with Drillsearch Energy.

The two Cooper-basin focused gas producers share a number of joint ventures and the potential synergies to come from a merger are clear. Adding to the likelihood of a deal, Kerry Stokes' Seven Group has built up 20 per cent shareholdings in Beach and Drillsearch.

Credit Suisse analyst Mark Samter and his team believe Beach could get a deal over the line even without the support of Drillsearch's board.

"We struggle to see what Beach are waiting for on the long awaited M&A," Samter said in a research note to clients.


"If they have to go hostile, it is hard to imagine too many investors who wouldn't lock in 25-30% profit at the moment."

Drillsearch reported a full-year underlying net profit of $58 million on Wednesday, which has ahead of the $52 million Credit Suisse forecast.

Street Talk revealed Beach had drafted in Macquarie Capital and Flagstaff, while Drillsearch had UBS and Goldman Sachs in its corner, ahead of likely consolidation in the Cooper Basin.

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