Three Oil Stocks Under The Radar – BPT, STO, OSH

  • Apr 13, 2019 AEST
  • Team Kalkine
Three Oil Stocks Under The Radar – BPT, STO, OSH

Oil prices are soaring continuously from the level of approx. $50 a barrel in December 2018 to the current level of above $70 a barrel. The rise in oil prices was majorly due to the supply concern in the global market, which was caused by the voluntary production cut from the OPEC members along with the U.S. sanctions on the significant oil exporting countries such as Venezuela and Iran.

OPEC members and their respective economies depend on high crude oil prices and to support the oil prices in the global market, the OPEC members are keeping production at bay since December 2018. The high oil prices provided an advantage to the oil companies, and oil companies have realised high sales proceeds per barrels. However, the OPEC members are adopting measures to switch their dependency on high crude oil prices and are currently bringing economic reforms. Before the phase starts and oil prices come to the normal level, oil companies can take advantage of high oil prices with high production in the environment of supply concerns in the international market.

Oil stocks under the radar with impressive YTD returns:

Beach Energy Limited

Beach Energy Limited (ASX: BPT), an oil and natural gas explorer and producer, headquartered in Adelaide, South Australia, hosts various prospects through which the company produces its oil and natural gas.

Operations:

The company hosts Western Flank oil and natural gas operations in Cooper Basin, which is a high potential site for new discoveries and exploration and is Australia’s most prolific oil and gas basin. As per the company, its joint venture and other activities in the area remains a substantial part of the Beach’s operations.

As per the company, it has drilled 95 wells in the Basin with a success rate of 82%, and the company’s Cooper Basin JV operations accounted for 31% of production in FY18.

With the high success rate in the high potential oil and natural gas basin, the company could take advantage of the supply gap caused by voluntary production cut from OPEC and realise high crude oil prices. The company recently entered a bulk deal.

The stock of the company closed at A$2.11 (as on 12th April 2019), down by 1.4%. The stock has yielded outstanding YTD return of 65.9% as on 11 April.

Santos Limited

Santos Limited (ASX: STO) is an Australian energy pioneer. The company operates in Cooper Basin and consider it as a strategically important asset. The key processing infrastructure in the basin is the company’s Moomba prospect, where the company recently completed an appraisal program.

Apart from the high potential Cooper basin, the company also operates in Papua New Guinea, which is a core element of the company’s focused Asian growth strategy.

Santos, the foundation owner, holds 13.5% equity interest in the PNG LPG project, and the company recently confirmed significant natural gas resources at PNG.

Santos holds partnership in Darwin LNG prospect in Australian and operates in Northern Australia through Amadeus, McArthur and Bonaparte Basins.

The stock of the company closed at A$7.030 (as on 12th April 2019), up by 0.14% as compared to its previous close. STO has generated an impressive YTD return of 32.4% till date to its investors.

Oil Search Limited

Oil Search Limited (ASX: OSH) operates all of PNG’s producing oil fields and controls significant 2C and 2P resources. The company has an extensive portfolio of business and controls interest in ExxonMobil PNG Limited operations. The company holds a 29% stake in the ExxonMobil’s PNG LNG project.

The company recently upgraded its Reserve and Resources and as per the company, it has 253.5 million barrels of 2C oil resources till to date, which marked a jump by 102% on a yearly basis, and total 2P and 2C reserves stand at 6,742.2 billion cubic feet till to date.

The company also relies on Kutubu, Moran, Agogo, Gobe Main, which acts as an associated gas field for the company and provides around 20% of the total gas feedstock required by the company.

Oil Search acquired a world-class oil asset in Alaska’s North Slope in February 2018. The acquisition marked the company’s strategy to pursue material and international liquids opportunities to complement its high-quality PNG gas assets.

The shares of the company closed at A$7.990 (as on 12th April 2019). OSH has demonstrated YTD return of 15.13%.


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