AusTex Oil Limited (ASX:AOK) Impressive Quarterly - Set For Growth, A Burrell Stockbroking Research Report
Sydney, Aug 31, 2010 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK) is an Australian listed oil and gas producer, focused on reworking and developing oil and gas leases in the USA. The operating focus is the US states of Oklahoma and Kansas.
Recent positive discoveries from the Clark #1 & Clarke #5 in Kansas maintain our bright outlook for AOK and reinforce their position as being on track as a financially self sufficient oil and gas producer.
Background:
AusTex Oil was listed on the Australian Securities Exchange (ASX) in January 2008 raising A$20 million. The primary focus was initially re-working oil and gas leases in the USA, in particular in Oklahoma and Kansas. Since listing the company has expanded its lease interests from 1,000 acres to ~70,000 acres.
Oil and Gas leases in Kansas are held in partnership with Castle Resources Inc. (CVE:CRI), the Kansas operator of the Radial Jet Enhancement Technology.
At the present time AOK is producing oil and gas from leases in both Oklahoma and Kansas. International Energy Corporation (IEC), a wholly owned subsidiary of Austex, holds a 10 year marketing agreement for the State of Oklahoma for the patented Radial Jet Enhancement Technology.
Investment opinion:
Austex offers investors the opportunity to own a well managed, debt-free business, with excellent growth potential in the full year 2011. The June quarterly demonstrated positive sales revenue, net of royalties and operating costs. The progressive ramp up of oil and gas production from Oklahoma will underpin the growth opportunities in Kansas and the pending acquisition in Kay County.
Austex are incrementally building a cash flow business. Their experienced technical team is delivering impressive exploration results and they appear on track to increase production to approximately 1,000 bopd in the next 12 months. With a strong cash position and no debt, we have a positive outlook for AOK. Existing cash flows underpin the value proposition, while potential future discoveries garnish this investment with significant potential.
We maintain our BUY recommendation and have increased our DCF valuation to A$0.32.
For the complete Burrell Stockbroking Research report on AusTex Oil, please refer to the following link below:
http://www.abnnewswire.net/media/en/docs/63619-ASX-AOK-AnalystReport-Burrell.pdf
About Australian Oil Company Limited
Australian Oil Company Limited (ASX:AOK) (OTCMKTS:SGCSF) is an Australian-based energy company focused on under-explored, recently over-looked, world class oil and gas opportunities near under-supplied markets. The Company is currently focussed on conventional oil and gas exploration and production in the Sacramento Basin in California. Australian Oil has a portfolio of natural gas and oil producing wells in addition to prospects and discoveries at various exploration and appraisal stages. AOK is in the process of evaluating the acquisition of oil and gas producing and exploration assets to enhance the Company's strategic needs and deliver shareholder value.
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