Home > Mixed results for upstream independents in latest Deloitte index

Mixed results for upstream independents in latest Deloitte index

Editorial
article image Australia’s top 25 upstream independents experienced a 4% decrease in their combined market capitalisation

Deloitte’s June quarter Upstream Independents League Table reveals that Australia’s top 25 upstream independents experienced a 4% decrease in their combined market capitalisation over the second quarter of 2013. Combined market capitalisation also fell $3.2 billion to $74.1 billion.

The June 2013 quarter report was compiled from the Australian Stock Exchange’s oil and gas producers sector. 

Deloitte Corporate Finance Partner Robin Polson explained that the decrease was experienced in an environment of generally stable oil prices and exchange rates. 

Key developments in the June 2013 quarter:

Sundance Energy’s market capitalisation increased A$104 million (approximately 34%) after the company delivered a strong quarterly operations update. It also successfully completed a $48.1 million placement to professional and sophisticated investors, the proceeds of which will primarily be used to accelerate the development of Sundance’s Eagle Ford assets in Southern Texas and Mississippian/Woodford acreage in Oklahoma in the United States.

With all revenues generated in North America, where 78% of assets are held, Neon Energy benefited from the fall in the Australian dollar and saw its market capitalisation increase by $11 million (approximately 9%). During the quarter, the company also commenced a joint venture drilling two new wells in Vietnam.

Beach Energy’s market capitalisation decreased A$344 million (approximately 19%) following the release of disappointing production and sales results due to major maintenance shutdowns at the company’s Moomba gas processing plant. The company’s share price has recovered in early July trade on the back of the release of its June monthly drilling report, media reports of an initiative to strengthen its balance sheet further by adding to its existing cash reserves, and the A$ 190 million received from Chevron in February.
 
Linc Energy’s market capitalisation decreased by A$728.8 million (approximately 63%), with the share price falling after the company announced a planned convertible bond issue. The proceeds will be used to pay down existing debt and strengthen its balance sheet.

Maverick Drilling & Exploration’s market capitalisation fell by more than A$123 million (approximately 43%) on the back of poor drilling results, with the share price fall compounded by the stock falling outside of the ASX200. 

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