Australian Worldwide Exploration (AWE) Update

Submitted by Share Trading on 15 April, 2008 - 12:18

Australian Worldwide Exploration (AWE) have an Outperform recommendation on their stock from Macquarie Research, an Australian shares analyst.

Australian Worldwide Exploration (AWE) - Outperform

AWE has recently bounced off its 50% fibbonacci re-tracement level and given solid market fundamentals could be well placed to re-test its highs. The friendly approach to ARC Energy could be beneficial if accepted and could provide a further boost to AWE. Fundamentals behind this call are as follows;

Stock Chart Source: IRESS
Past performance is not a reliable indicator of future performance.

Australian Worldwide Exploration (AWE): Fundamental View

Macquarie Research Equities (MRE) Fundamental View:
1. AWE has confirmed it is in exclusive negotiations with ARC Energy
2. MRE believes the portfolio of common assets held by both AWE and ARC (Cliff Head (AWE 27.5%, ARC 30%) and BassGas (AWE 30%, ARC 12.5%) would make them a neat fit for each other.
3. MRE believes there is potential upside to both assets
4. MRE believes >A$50m net cash and corporate overhead savings could be achieved.
5. In MRE’s view the current robust oil price coupled with strong Tui production leaves AWE in a strong cash position and makes capital raisings or debt financing unnecessary to fund the purchase.
6. Catalyst: Upside at BassGas and Casino plus continued Tui outperformance.