Roc Oil Company (ROC) Share Trading Recommendation

Submitted by Craig Strzelecki on 2 March, 2007 - 03:53

Roc Oil Company (ROC) have a changed share trading recommendation of Hold and a reduced share price target of $3.70 per share from $3.80 from analyst Citigroup Investment Research (CIR). The downgrade follows the three month delays for prospective Angloan exploration to commence. The company reported a disappointing Financial Year (FY) profit result with a loss of $59.6M against CIR's forecast of a profit of $12M and consensus of $10M. Angola drilling to start mid May where the plan is to have two rigs working onshore Cabinda (net 60%). The first well could spud mid May and take six weeks to reach its target (estimated at end June). The plan envisages 3 to 6 wells drilled back to back. CIR estimate a 50% chance that a 25MMbbl field can be delivered. Already offshore Cabinda some 4.5Billion barrels of oil has been found. Big capital expenditure (capex) commitment to accelerate production where the cost to ROC of optimising the Chinese Zhao Dong fields is estimated at US$108.4M (A$142M). The resultant production profile is uncertain and likely to be variable. However, CIR suggests production from the C & D fields could rise from 23,000Bopd towards 27,000Bopd by 2008 and further into 2009 as C4 comes on line. The Chinese Beibu Gulf Field looks good with the Wei 6-12 South JV will commence Front End Engineering and Design (FEED) work on the Beibu Gulf oil fields (net 19.6% after CNOOC backing in) at end 1Q07. A Formal Investment Decision (FID) could be made by end 2007 for a mid 2009 start-up of the 30 to 40MMbbl reserve.

Roc Oil Company Limited is listed on the Australian Stock Exchange (ASX) under stock code ROC. You can view their investor website here. ROC was listed on the ASX on 5 August, 1999. The chairman of Roc oil is Andrew J Love and the CEO is Dr John Doran. The company is one of Australia’s leading independent oil and gas companies, listed on the ASX and the Alternative Investment Market ("AIM") of the London Stock Exchange with a market capitalisation of around $900 million. ROC operates and has interests in four main regions: Australia, China, West Africa and the UK. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade ROC. Check your charts and good luck with your share trading!