Market Update & Important Indicators
U.S. stocks rose Tuesday, rebounding from two days of losses, as investors awaited news on Greece's bailout talks and the outcome of the Federal Reserve's policy meeting. All of the S&P 500's sectors were up, led by gains in consumer-staples stocks. The Fed kicks off its two-day meeting Tuesday. While it isn't expected to raise interest rates at this meeting, investors will parse the central bank's statement and Chairwoman Janet Yellen's news conference for clues on how officials view the U.S. economy and when they will feel comfortable raising rates.
European stocks fell Tuesday as fears that Greece could default spooked markets. Greek Prime Minister Alexis Tsipras on Monday expressed defiance over demands by his country's creditors, insisting lenders soften their calls for pension cuts. That followed a collapse of talks between the two sides over the weekend. Last week the International Monetary Fund pulled out of talks, citing a lack of progress.
Stocks in Asia mostly fell Tuesday, with China succumbing to another bout of volatility, as pressure from a wave of new initial public offerings spurred investors to sell down stakes in existing shares. The selling in China also follows a move by the China Securities Regulatory Commission last Friday to limit so-called margin financing, the practice of using borrowed money to make bets. Elsewhere in Asia, major markets tracked losses in the U.S. after bailout talks between Greece and its European creditors broke down.
Base metals were weaker on the LME overnight, with copper down 1.0% and nickel off 1.8%. Brent crude finished marginally lower at $63.65/bbl. Gold is steady, trading at $1,182/oz.
In This Issue
AWE Limited (AWE) | Waitsia-1, worth the Wait…and…See
Results from Waitsia-1 well in the Perth Basin is another step towards confirming the potentially largest onshore gas discovery in Western Australia. A 95m gross gas column (18m net with 18% porosity) was confirmed across three conventional reservoirs with wireline pressure data indicating the intervals in the Kingia and High Cliff sandstones are likely to be continuous with those observed in the Senecio-3 well (~3km away), implying a large aerial extent of the gas fields. Further upside to volume estimates comes from the Waitsia gas water contact (GWC) being 350m below the Waitsia field (providing down-dip potential) and the considerable thickening of High Cliff Sandstone pay interval with improved reservoir quality in Waitsia-1.
The gas is mainly methane with ~4% CO2 making it pipeline quality with very little processing required. The Waitsia-1 well follows the three well program started by Senecio-3. Waitsia-2, which will be spudded shortly is located ~400 from the mothballed, Xyris gas plant which would be the optimal choice for early development gas production/testing next year. Buy recommendation retained, target price upgraded to $2.07 ($1.88 prior).
Argonaut’s Stock Coverage & Recommendations
Recent Contacts & Presentations
Medusa (MML), Pacific Energy (PEA), Orbital (OEC), Peet (PPC), Alexium (AJX), Austal (ASB), Empired (EPD), Rewardle (RXH), Saracen (SAR), Kibaran (KNL), Sino Gas & Energy (SEH), Dacian (DCN), Saracen (SAR), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Buru Energy (BRU), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), MZI Resources (MZI), High Peak Royalties (HPR)