News

November 30, 2008

Conference Report 2: Coastal Energy, Providence Resources and BPC Limited Highlight Opportunities From Exotic Thailand And The Bahamas To The UK And Ireland

By Martin Clark

While the City weather may have been cool outside, talk of exotic destinations such as the Gulf of Thailand and the Bahamas may have helped improve the mood of investors inside The Brewery during the 22nd Oilbarrel.com conference. Frank Inouye, executive chairman of Coastal Energy, urged delegates to “mind the gap”, referring to the differential between current depressed prices and true stock valuations, echoing earlier analysis that some junior oil stocks could be under priced. With plans of cranking up its own output from Thailand, this is a situation in which Coastal is familiar, after seeing shares plunge in recent months. He said the under valuing of shares has become “ever more obvious in the current market” urging investors to take a longer-term view. “A gap exists here – hopefully we can correct that.”

Looking longer-term certainly opens up more possibilities. “We believe core Byvalue rests with the reserve base,” Inouye said. For Coastal, this means Proven (1P) reserves of 19 million barrels of oil equivalent and Proven Plus Probable (2P) reserves of 45.5 million barrels of oil equivalent.

But even these do not represent the whole story. The AIM-quoted company has successfully tapped into these reserves with existing production of around 6,500 boepd, mainly from Songkhla, though this is...