OEL achieved revenue of US$12.m and EBITDAX of US$7.5m this quarter. After development and exploration costs, OEL recorded a negative movement in net cash of US$5.2m. OEL’s sales totalled 166,298 bbl of oil and 177,802 Mcf of gas. Oil production was stable compared the previous quarter with only a negative 2% change. The recent share price weakness is a buying opportunity as OEL is trading on an EV/EBITDAX multiple of 3.1 based on our forecasts. If we annualise this quarterly result and assume oil prices and production remain at these levels this drops to 1.66x for the FY which is extremely cheap. We maintain our Buy recommendation with a price target of $0.10.
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