It said the company is expecting a total of five new wells (three firm and two subject to further farmout negotiations) prior to March 2002.
"The risk valuation on the upcoming program is 35-39 cents per share (cps), add to this 37 cps for the in-situ valuation of known reserves and 27 cps in cash, and AWE has a minimum valuation of $1.08 per share," a DJ Carmichael report said. "Success at Cliff Head in December would add 86 cps value if it holds 120 million barrels of oil. Earnings of 1.3 to 1.5 cps are expected in 2002 and by 2005, earnings will grow by 10 cps."
The brokerage house also recommends Tap Oil as a speculative buy. The Perth-based oil and gas player has made a new discovery at its 12.2% controlled Denver prospect, located 12km south of Varanus Island. Denver intersected 58m of reservoir and is said to contain gas and condensate.
As for Perth-based engineering group, Clough Ltd, Carmichael recommends to accumulate on weakness. The group has moved from having $740 million worth of work in hand at 30 June 2001 to an expected one billion dollars' worth of work in progress by the end of November.
"We expect earnings of 8.6 cps in FY2002 and this supports the current price of 97 cents but the recent issue may limit further upside," Carmichael said.
