Edison Releases Report on Australian Oil and Gas Sector

Aug 15, 2013, 13:48 ET from Edison Investment Research

LONDON, August 15, 2013 /PRNewswire/ --

Edison Investment Research, a leading international investment research firm, announces the release of a report highlighting the Australian oil and gas sector. Intended to showcase the emerging oil and gas exploration and production (E&P) sector to Edison's global investor base, the 75-page report provides a detailed analysis of the Australian E&P sector, with a specific focus on the onshore unconventional space.

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In the report, analysts John Kidd and Ian McLelland provide a detailed account of the onshore sector and present a framework for investors to consider by analysing the various plays and players in the onshore Australian space. The report includes two-page profiles on 16 of the most material small- to mid-cap listed companies active in the onshore sector.

Ian McLelland, head of Edison oil and gas research based in London, said:

"This report responds to strong demand from our investor audience to raise understanding of the Australian oil and gas space. With a A$200bn wave of new-build LNG export capacity set to arrive to market in 2014-15 and the widespread view that a significant supply-side gas gap is likely to unfold as a result, there is a high level of interest in the question of 'what next?' in the Australian sector. There has been scant attention paid before now to the emerging onshore E&P sector, which is exactly the gap this report fills."

The report's lead author, Edison's Asia-Pacific-based oils analyst, John Kidd, says the Australian onshore E&P sector is at a particularly interesting stage. "Despite the comparisons many people make to the North American sector, the Australian onshore sector remains in its physical and commercial infancy. The dominant themes are of vastness and shallowness. Whereas in the deeply mature North American sector there are thousands of independent E&P companies working the land, in the Australian sector there are just a few dozen. A number of these hold entitlement to huge acreage positions in frontier basins with very little history of exploration. Some have been successful in striking deals with major multinational E&P companies to support and bankroll early-stage work programmes."

For junior companies with unconventional acreage, the report concludes a broad market-discounting theme to inferred asset values. "Against the deals that have been struck, our analysis suggests that financial markets are only prepared to attribute around 15% of the entry price that industry has been prepared to pay for access to the same assets."

"We expect that discount to unwind as acreage is de-risked, but investors need to be selective," Kidd says. "Although a number of companies have enjoyed early and encouraging exploration success with their unconventional work programmes, each player's ability to commercialise and ultimately monetise resource will hinge on the quality of each company's assets, management and partnerships." The report provides an array of information and analysis to assist investors with this decision making.

For the full report see: http://www.edisoninvestmentresearch.com/research/sector 

About Edison Investment Research

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals works with leading companies, fund managers and investment banks worldwide to support its capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Berlin, Sydney and Wellington. All reports published by Edison are available to download free of charge from its website.

Edison is authorised and regulated by the Financial Services Authority (http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584).

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact:
John Kidd
Edison Investment Research

Ian McLelland
Edison Investment Research

Will Corkill
Edison Investment Research

SOURCE Edison Investment Research