Buru's bourse beating
Canning Basin hopeful Buru Energy lost 18.8% off its share price yesterday after it announced disappointing reservoir porosity results from its Ungani-3 appraisal well, which intersected the top of the targeted dolomite about 77m above the oil/water contact of the previous two wells.
Macquarie Private Wealth, which remains a key backer of Buru, said the well did not lose the same level of drilling mud than the previous two wells.
"Perhaps more telling is the lack of oil or gas shows, which again were prevalent at Ungani-1," MPW said.
StockAnalysis analyst Peter Strachan told the Australian Financial Review the result indicated that the Buru-Mitsubishi field could hold about 5 million barrels compared to hopes of up to 20MMbbl.
"Ungani was going to kick in $50 million to $70 million a year into Buru's accounts from 5000 barrels a day and that would keep the wolf from the door in terms of having to go back and raise more equity to do all the other work," Strachan told the newspaper.
"It's disappointing."
However, MPW still expects around $50 million a year from the field.
"Buru continues to target a 3000 barrels of oil per day average production rate and 5000bpd exit rate in 2014, suggesting that the poor result at Ungani-3 has little read-through to the core development," it said.
"Indeed, Ungani-2 has been delivering 1000bpd with a recommencement of production at Ungani-1 and the introduction of additional trucking expected to lift production rates to 1500bpd.
"Furthermore both wells continue to produce with minimal water cut.
"At plateau production rates for phase 2 of 5000bpd, we forecast the core Ungani development will deliver about $50 million of operating cash flow net to Buru."
Overall MPW said the share price reaction to Ungani-3 was overly harsh.
It maintained an outperform rating for the stock plus a 12-month share price target of $2.60 - made when the share price was at $1.60.
Sharing the glove
Rubber king Ansell has lifted net profit in the recent half by nearly 15% year on year, which coincides with its startling growth in the oil and gas industry glove market.
According to AAP, Ansell CEO Magnus Nicolin said the company had 10 types of gloves in its oil and gas-targeting range compared to none 18 months ago.
Ansell noted its most recently launched product, the oil impermeable ActivArmr 97-210 glove, was already being adopted by "some of the largest global oil field services and production companies worldwide".
The glove-making performance helped Ansell overcome emerging dysfunction in its key condom line of business as it said the sexual wellness business unit had a "challenging half".
Bechtel attrition
Bechtel, which is building the plants for all three of the sanctioned Curtis Island-based LNG projects in Queensland, expects to cut 2000 jobs by year-end, according to the ABC.
The engineering giant's total LNG project workforce is expected to fall from a peak of 11,000 to 9000 jobs as the projects move from construction to commissioning phases.
Bechtel Gladstone general manager Kevin Berg told the Gladstone Observer that a small number of redundancies had occurred to date, while Bechtel was still recruiting for special-class welders, instrumentation, riggers, pipe fitters and electricians.
The relevant Bechtel contracts end once the projects go into operations.
BG Group expects first exports from its Queensland Curtis LNG project in the December quarter while the Santos-led Gladstone LNG and Origin Energy-led Australia Pacific LNG projects aim to hit this milestone in 2015.
