TAP - Tap Oil

[mime]

What do you guys think?

I bought them @ $1.9 a share and still waiting for them to do something big. From what I've read about them they sound pretty good. And there is always demand for energy.

[The Barbarian Investor]

Hi Mime,

I like TAP OIL and would expect them to go to around $3.00 over time; i dont hold any but was looking at buying in at around $2.07 not long ago with a Stop Loss of $1.50.

On my watchlist now

[GreatPig]

From a purely charting point of view, to me it looks like it might be forming a small double top, which could signal a short term fall.

And when you look at the longer-term view, it's quite high above its longer-term trend line.

While of course I have no idea what it is going to do, I would say there's a fair chance of it falling in the short term.

As usual, should you or any of your associates be injured or killed... oops, wrong disclaimer... I mean, this is only my opinion and should not be taken as any sort of advice or recommendation.

Cheers,
GP

[brerwallabi]

GP you called it right, a pick up here in the low $1.70s next week if falls that low could prove a very astute buy I share Barb's sentiments on this, $3.00 eventually. Hope you have not bought yet Barbarian, anyway if you have dont panic.

[britishcarfreak]

Well it looks like you guys were all right on your forecasts back in mid 2005.

BUT - look at it now. It's come back down and has formed some kind of a support at about $2.25. Given its recent go at testing the mid 2.20's I wonder if this is a signal to buy or whether it's going to settle down.

What do people think?

It's currently below it's 200day average, it's tested the lower support, relative strength has turned up and it's gone through and back up from the bottom of a 20day price channel.

I feel inclined to buy some.

[nizar]

As an alternative to TAP....

have a look at AWE and see how many projects coming into production this year. Look at top20 shareholders, plus director topped up with 900k shares in december...

[mime]

Does anyone know why this stock is underpreforming comparing to other energy stocks?

[Profitseeker]

Fat Prophets recommended this one.

[Profitseeker]

Here it is.

Tap Oil - The Cattle Dog
FAT262, 18 Jan, 2006
The Pound
Printer Friendly


WEEKLY CHART




Tap Oil (TAP) has established a solid production base on
Western Australia's North West Shelf and is looking to expand
its exploration and production interests in New Zealand. The
company is a high quality mid-cap oil producer, with an
enviable track record of profitability and exploration
success. Tap has aggressive exploration activities in place,
comprising an extensive well-drilling program that is aimed at
significantly increasing its reserves position.
Financially, the company is generating strong cash flow from
robust oil prices, maintains a cash position of close to $100
million and has no debt. Adding to the bullish outlook is the
fact that Tap is highly leveraged to the oil price with
minimal hedging in place. With investors having significant
exploration exposure through its drilling program, upside
potential remains.




:confused:

[mime]

I thought it looked like a great stock too but its preformance is very lackluster

[mime]

Ok guys does anyone know what's up with this stock?? All the other energy stocks are moving forward and this on is sitting still. Is there something I'm missing?

[rub92me]

Ok guys does anyone know what's up with this stock?? All the other energy stocks are moving forward and this on is sitting still. Is there something I'm missing?
My guess: Lots of punters were buying on TAP's forecasts of a very juicy Jacala-1 Exploration Well, which came up dry on 19/04. It would have conceivably jumped considerably otherwise?

[mime]

Thanks for the info. That would probably be the reason.

[kerosam]

from what i read in fat prophets' report, this year TAP is concentrating on exploration. Their best bet was Jacala which went empty. how about the rest? not worthy to put a bet on?

[rub92me]

Well, they have plenty of money in the bank and other wells coming on stream. Jacala could have made a significant difference but was always a bit speculative. No one knows how this stock is going to perform in the future, however ongoing strong oil prices will obviously be beneficial for them.

[mlennox]

looks set! :2twocents

[mlennox]

Yogi any chance you can do a GANN study on this one?

[Alien]

Well I am in on this one at $1.57.

Market Cap around $245m and they have approx $100m in cash ad no debt.

With a couple of dry well results and oil on the way down i think they have been oversold well and truly.

Do your own research.

What do others think about this stock representing good value??

[Fab]

Personally I am back BPT :)

[mime]

Anyone know why it's stock price isn't following the same path as other energy producers? Anyone think it's a good buy?

[porkpie324]

I've traded TAP twice using CFD's, taken a small loss both times,however has been sold down on low vol, has picked up yesterday on some increased vol, but slipped again today, could have been dead cat bounce or perhaps TAP is finding support, but they are buying there own shares.porkpie

[Beethoven]

Anyone know why it's stock price isn't following the same path as other energy producers? Anyone think it's a good buy?

I've trade this stock as well and made a small loss everytime. TAP has continued downhill since no oil was found in the jacala drilling. If they found oil from the jacala drilling this stock would have been worth $3 and imo i think a lot of investors got burnt trading it at the time so im not going to be too quick into jumping into this one unless they find a large deposit.

[vicb]

Must be close to the bottom now. Will be looking to buy for a short turn over

[kennas]

I haven't a clue of the fundamentals of this but I agree that it's looking to bottom out I reckon. Long term chart shows a likely base between $1.30 and $1.60 ish.

Any comments on the fundamentals and resons why the big sell off?

[Philippe]

Isn t this a double bottom potential on the daily chart? :)

[kennas]

Isn t this a double bottom potential on the daily chart? :)

Not that I see. Can you show that?

[oily23]

Sorry for the gratuitous ramp up (yes, I hold shares), but isn't Tap Oil looking ridiculously vulnerable to takeover at the moment?

Steady production from N-W Shelf, highly prospective exploration (Marley, Barque, Thailand, Amulet, etc), plus $110 million in cash and no debt.

Surely the likes of ARC Energy, Beach (BPT) and even AWE are sniffing around this one. No need to raise cash through a dilutive rights issue, just buy Tap Oil at $1.95 instead!!!

[ROE]

Tap oil look cheap, trading below their book value and historic earning look great.

[TheRage]

I was questioning Tap's future earnings under another thread this morning. Their forecast earnings for FY07 and Fyo8 are considerably lower than Fy06. Do you have any ideas why. I suspect some of this has to do with fluctuating oil prices but more likely oil reserves.

[Bush Trader]

I was questioning Tap's future earnings under another thread this morning. Their forecast earnings for FY07 and Fyo8 are considerably lower than Fy06. Do you have any ideas why. I suspect some of this has to do with fluctuating oil prices but more likely oil reserves.

The Rage & ROE

I cannot fully answer your questions, however I am happy to give you an insight into my own research, before I purchased the stock. I too thought it looked cheap and am after long term, value oil exposure in my portfolio with good exploration upside. However I am only a fundamentals amateur.

Exploration is of high importance to the success or failure of TAP. Without new discoveries the companies producing assets will gradually decline. IMO this is what the market has focused on of late, this decline. Note the recent half yearly results, which confirmed a production fall from 1318 million barrels the previous year to 866 million barrels YTD. This was a culmination of reservoir decline and Cyclone activity in the Carnarvon basin.

Revenues have been maintained relatively intact with a higher Oil price offsetting the decline in production. Income only fell by 10% for the period to A$48 million. Net profit fell 23% to A$10.9 million due to an extraordinary exploration write-down of A$6.8 million. (See also ARQ – these write-downs are in vouge in the Australian Oil Industry)

The advantages of the stock IMO are:

They are not hedged! They average for the 6 months up to September A$95.57/barrel. (This might be a problem short term if oil does not for some new technical supports). There is little further downside in the stock as the market has already accounted for a declining P/E Ratio for 2007 and again in 2008, combined with a fall in ROE from 12% to 9%. What the market has not considered is the companies exploration value. Projects such as the Harriet JV, and the SC41 project in the Philippines are interesting prospects. SC41 covers an area of 5000 km2, and TAP mgt have indicated after initial research that it could produce 50 to 150 million barrels.

If Tomahawk reads this post, he may enlighten us with his expertise in Oil Stock Valuations.

Cheers

[theasxgorilla]

The only thing going for this stock technically right now is that the weekly ForceIndex is showing higher lows (bullish divergence) against price which continues to form lower lows. I was expecting it to find support at the 50% retracement of the all-time-high, but it fell through. Right now nothing would surprise me with this stock.

[reece55]

Guys
I believe there is a lot to like about this stock. In fact, of all the oil stocks in 2007, this is my preferred pick (although, the way sector is being destroyed at the moment, one would argue why you would enter it at all). Here are my reasons:

1. Cash backing - For every $1 you purchase of the company at the present stage, 2/3 of it is cash. I don't think I know of any other producing oil stock with such a valuation.

2. Exploration at present is 100% funded through cash inflow from existing reserves.

3. UBS as substantial holder has increased in November, which coincides with the present support level established.

On top of this, technically, from my limited knowledge of Elliott Wave, I believe that Tap has gone through the complete market cycle (welcome for anyone to provide analysis here if I am wrong). There is strong support at about 1.41 and most indicators lean this stock on the bull side.

However, TAP NEED TO STRIKE SOME OIL SOON! They have an excellent inventory of exploration leases, but by far the biggest factor driving them down is their declining reserves.

Still, risk/reward wise, I really like this one. I regularly watch, patiently awaiting my entry point.

Cheers

[reece55]

Theasxgorilla
Thanks for your take here - initially I had the highs in Jul 05 as a wave 5, but in review, what I labeled as a wave 4 in May 05 actually retraced greater than what I labeled as wave 1. Just learning here! I normally focus on mechanical trading, with support and resistance. But starting the long journey into ew.

Cheers

[Bush Trader]

Another possible scenario is that with the companies current cash reserves, sound exploration upside, combined with strong chance of further industry consolidation in the mid term, could see TAP be considered another potential HDR and therefore an attractive takeover target.

Question: If supports are broken at A$1.41 where do you see the next supports?

[theasxgorilla]

Reece, I didn't put an EW count on TAP as I couldn't really see one. If however the sharp move up into the Aug 05 peak was an extended wave-5 (ie. longer than wave 3) then the consolidation that preceded it might be a wave-4. This being the case TAP has retraced back into that zone. It's typical for an A-B-C correction to retrace back into the price-zone of wave-4 from the preceding impulse move.

Bushtrader, I'd guestimate next support at $1.30.

[TheRage]

Gentleman thank you for all of your intelectual replys. Does anyone have the facility to post up a chart on crude oil and if so what is there take on it.

[Bush Trader]

Gentleman thank you for all of your intelectual replys. Does anyone have the facility to post up a chart on crude oil and if so what is there take on it.

Source FNArena : "Momentum as defined by various measures is now near decade long extremes for crude oil futures and Barclays chartists note that various retracement levels, moving averages (including the 200 week) and the psychologically important US$50 per barrel area are all very close.
This should make for fertile ground for one of those strong rebounds for which the crude oil market is well known, the chartists believe. Barclays Capital is currently looking for WTI to weaken further until the US$50/49 region has been reached for a subsequent bounce – probably as high as 15%.

Investors should not forget this bounce would still only be a correction within a bear market, the chartists note, while arguing this sort of bounce is now becoming increasingly overdue.

Barclays Capital believes recent damage to oil's long term uptrend has created a new trading range between US$45-70, but possibly lower."

An enlightened tech trader might offer their views.

Cheers

[porkpie324]

TAP has been my bunny every position I've taken has been a loser, even though its a recomended hold by a large tipster.
But has it bottomed?, its showing MACD divergance on increased volume, but I'm a bit gun shy with TAP at the moment. porkpie

[theasxgorilla]

I'm with you PorkPie. I've done extensive back-testing (admittedly using ONLY my own system) with TAP and got slaughtered. It doesn't play nice :)

[Uncle Festivus]

I'm thinking here 'the trend is your friend', however there is no trend, just bubbling along the bottom, so I would think that nothing much will happen until either 24 Jan when the quarterly is released or oil makes a dramatic reversal. May be able to keep a close eye on the volume leading up to the ann for insiders trading?. The best you could say for the chart is that there is a double bottom forming on the daily. All that cash though!!!!. Interesting :dunno:

[TheRage]

Source FNArena : "Momentum as defined by various measures is now near decade long extremes for crude oil futures and Barclays chartists note that various retracement levels, moving averages (including the 200 week) and the psychologically important US$50 per barrel area are all very close.
This should make for fertile ground for one of those strong rebounds for which the crude oil market is well known, the chartists believe. Barclays Capital is currently looking for WTI to weaken further until the US$50/49 region has been reached for a subsequent bounce – probably as high as 15%.

Investors should not forget this bounce would still only be a correction within a bear market, the chartists note, while arguing this sort of bounce is now becoming increasingly overdue.

Barclays Capital believes recent damage to oil's long term uptrend has created a new trading range between US$45-70, but possibly lower."

An enlightened tech trader might offer their views.

Cheers

Thank you for taking the time to post up the chart.

[Bush Trader]

Everything from WPL To BPT is off solidly 1.8-3.6% respectively, yet little TAP has held it’s ground and hasn’t moved an inch. Someone is buying it slowly but surely, I’ll bet we are due for a substantial change in holding notice shortly.

[rub92me]

Everything from WPL To BPT is off solidly 1.8-3.6% respectively, yet little TAP has held it’s ground and hasn’t moved an inch. Someone is buying it slowly but surely, I’ll bet we are due for a substantial change in holding notice shortly. I think they're still buying back shares as well, which helps to keep a floor under it. Have been watching this stock for about 9 months now, and they've had an incredible bad run of luck, hitting dry hole after dry hole, even on the lower risk prospects. Very tempted to get in, but the current oil price isn't helping them much either. Not convinced yet...

[theasxgorilla]

In aid of stimulating discussion but at risk of stirring people up, I have to ask why would you follow a loser down into a dry hole?

[rub92me]

In aid of stimulating discussion but at risk of stirring people up, I have to ask why would you follow a loser down into a dry hole? Moral support? To offset capital gains? Seriously, I think they have proven in the past that they're quite a capable bunch, and it is a high risk business after all...

[ROE]

TAP on the move again?

[Bush Trader]

Following on from my post last week I thought you would enjoy the following:

The question obviously now is: what follows?

Source FNArena "Chartists at Barclays believe it is time to think of a "relief rally". And where experts such as Dennis Gartman have been calling for a swift return to the high US$50s, the chartists suggest resistance at US$55.40 is likely to hold during the upswing.
As can be seen on the chart below, the so–called Head and Shoulders pattern neckline is at US$55.40 – described as "important resistance" by Barclays. After the market has satisfied itself with a jump to this level, it'll be time to resume the downward movement again, the chartists say.
Were spot oil to sink below the US$49/50 support zone instead this would suggest the the short-term bearish potential of this market has been underestimated, say the chartists. It is their view that major damage has been done to oil's long-term uptrend. A range trade is envisioned for the medium term - "ideally between 45-70 and possibly lower"

Is it a dead cat bounce? Or is it a sign that tensions in the middle east are just too hard to ignore for the hedge funds?

[Phoenix]

bump :). I just want to know what you all think about this stock. From my point of view i thnk its a good buy. No debt and plenty of money for exploration and also maybe the U.S will go to war in iran so OIL will skyrocket.

[rub92me]

Well, the stock was showing some signs of life today with reasonable volume. 1.40 - 1.45 looks like a solid support and has been tested a few times.
Despite exploration challenges they managed to stay cash positive and still have > $100 million in the bank and quite a low market cap. Management appears conservative and pays attention to shareholders (previous share buy back, no high cash intensive exploration plays that need capital raising). All they need is a bit of luck this year. I'm thinking of getting in, but it would be good if they can break above 1.70 - 1.75 so might wait for that as an indicator that the tide has turned :2twocents

[annalivia]

Well, the stock was showing some signs of life today with reasonable volume. 1.40 - 1.45 looks like a solid support and has been tested a few times.
Despite exploration challenges they managed to stay cash positive and still have > $100 million in the bank and quite a low market cap. Management appears conservative and pays attention to shareholders (previous share buy back, no high cash intensive exploration plays that need capital raising). All they need is a bit of luck this year. I'm thinking of getting in, but it would be good if they can break above 1.70 - 1.75 so might wait for that as an iuse ndicator that the tide has turned :2twocents

I'm thinking of buying a house for $500,000. I might wait till it breaks above $600,000 so I know the tide has turned.
Sorry to be a smart ****. However..............

al

[rub92me]

I'm thinking of buying a house for $500,000. I might wait till it breaks above $600,000 so I know the tide has turned.
Sorry to be a smart ****. However..............

al

Each to their own I guess. Buying on breakouts is a tried and tested approach for stock trading. It probably isn't for the house market. I don't know and I don't care. I'm not trading houses.

[canaussieuck]

Each to their own I guess. Buying on breakouts is a tried and tested approach for stock trading. It probably isn't for the house market. I don't know and I don't care. I'm not trading houses.

Well said mate! I nearly fell out of my chair when i read "I'm not trading houses"!



Cheers,

[Dr Doom]

Tap Oil Limited (“Tap”) advises that it has become aware of recent movements in the
company’s share register, which it feels obliged to report to ensure the maintenance of a fully
informed market.
As part of Tap’s regular process of monitoring its share register, it has become aware that
Singapore Petroleum Company Limited (“SPC”) has acquired a beneficial interest in a
significant number of Tap shares. Tap’s share registry has confirmed that as at
21 February 2007, SPC held a beneficial interest in approximately 7.3 million ordinary shares
through nominee holders, representing approximately 4.7% of the issued ordinary capital of
company.
Tap will be seeking discussions with SPC as to its intentions with respect of this
shareholding.

[TheRage]

Tap Oil Limited (“Tap”) advises that it has become aware of recent movements in the
company’s share register, which it feels obliged to report to ensure the maintenance of a fully
informed market.
As part of Tap’s regular process of monitoring its share register, it has become aware that
Singapore Petroleum Company Limited (“SPC”) has acquired a beneficial interest in a
significant number of Tap shares. Tap’s share registry has confirmed that as at
21 February 2007, SPC held a beneficial interest in approximately 7.3 million ordinary shares
through nominee holders, representing approximately 4.7% of the issued ordinary capital of
company.
Tap will be seeking discussions with SPC as to its intentions with respect of this
shareholding.

I read the announcement as well and thought 5% is a long way off of a takeover. On the balance sheet however the company is certainly attractive. You would only need to spend 128 million (256million market Cap/2) to gain 50% control of the company. You being the acquirer know that the company has net tangible assets worth 240 million. So far you have spent half of this to acquire twice the amount of assets. You also know that there is 100million dollars in cash ready to be spent on other acquisitions. Therefore if I was SPC I would buy 50% controlling interest sell all the net tangible assets to other oil companies pay off any loan in acquiring TAP and then keep the 100 million cash any excess received from NTA. REmaining shareholders not so happy SPC very happy. Obviously half of the cash would still belong to existing shareholders but fact remains if NTA could be split up there is potential for a smart company to sell this company off.

[Dr Doom]

There was movement at the station for the word had passed around.............

[Feng]

http://www.smh.com.au/news/xchange/tap-oil-shows-slick-timing/2007/02/26/1172338548097.html

Tap Oil shows slick timing

February 27, 2007

It's always wise to sweeten a piece of bad news with something more palatable.
IT'S pretty unusual to see a share price increase after a company reports a very poor financial result.

But in Tap Oil's case, there could be an explanation for Friday's heightened trading, which pushed the share price 4c higher to $1.51.

Tap yesterday revealed oil refiner Singapore Petroleum - a recent joint venture partner on an exploration block off Australia's coast - had recently amassed a 4.7 per cent stake in the company.

Such news typically wouldn't be announced until a shareholder hit the 5 per cent mark and was forced to file a substantial holding notice.

But Tap managing director Paul Underwood yesterday told Xchange he had learned of the holding last week and was "obliged" to announce the price-sensitive information under continuous disclosure rules.

Tap learned of Singapore Petroleum's stake before it reported an $825,000 adjusted profit - $19 million short of a Macquarie Equities estimate - on Friday.

But Mr Underwood said it was wrong to infer "cuteness" in terms of the timing.

"I was hearing rumours on the weekend," he said. "We formed the view that if this comes out of the rumour mill, it would be even worse."

Singapore Petroleum informed the Singapore Stock Exchange it had purchased the shares at an average of $1.47 since last year. A Singapore Petroleum representative told Xchange the shares had been acquired "for investment purposes" and said the company would provide further updates "as and when appropriate".

Tap shares predictably soared yesterday, closing 13c - or 9 per cent - higher at $1.64 after trading as high as $1.70.

Before the Singapore Petroleum news was made public, Goldman Sachs JBWere analysts had said there was potential for underperforming Tap to take part in Australian oil and gas sector consolidation.

[watsonc]

Things are looking good!
Fat Prophets have recently put a buy recommendation on TAP.

Resurgence underway

Exciting exploration period over 2007 and into 2008.

Tap Oil retains more than $100 million in its coffers and is planning on spending more than $40 million on exploration over the next 12 months. The company has no debt whatsoever and is completely unhedged with respect to its oil and gas production.

[rub92me]

Yep, it has been a nice steady rise up with decent volume over the past 3 weeks or so and plenty of 'bot' activity indicating big players are involved as well. From memory, Fat Prophets initially bought at around 2.78 and remained a hold recommendation until recently when the price was around 1.50. SP seems to gradually break free from the long down and sideways movement. I got in once 1.70 was broken. Hasn't exactly zoomed up from there, but willing to give it a year or so to see what happens (unless it breaks down).

[Dutchy3]

Another oiler with a heap of momentum starting to play out. Lovely increase in relative volume these last weeks and a slow and steady accumulation in the weekly MACD

All the best to those that hold

[hangseng]

Another oiler with a heap of momentum starting to play out. Lovely increase in relative volume these last weeks and a slow and steady accumulation in the weekly MACD

All the best to those that hold

Business section headline of The West Australian today. Talk of a possible takeover by Alinta with 3 of the seniors already collecting 5% of TAP in recent weeks. Good article worth a read.

I took a position last week, technically it strongly looked like something was up. I just didn't expect this, I will hold now and take what has been termed today as TAP being "the cusp of the hocket stick and about to rise".

Interesting as well is Gavan Wendt of Fat Prophets comment in the same article, hinting of TAP potential and seemingly supporting the Alinta position to take adavantage and develop the excellent assets of TAP, albeit cryptically.

Should be a great few weeks ahead for TAP. Alinta is already seeking a board seat, the start?

[rub92me]

Looks like not too many people are buying in to this takeover rumour. I don't think the TAP directors are too keen on a takeover anyway. But at the end of the day money talks and everything has a price.

[hangseng]

Looks like not too many people are buying in to this takeover rumour. I don't think the TAP directors are too keen on a takeover anyway. But at the end of the day money talks and everything has a price.

This is no rumour, look at last Saturdays West Australian.

This is beginning to look very interesting and enough so for me to venture outside my comfort zone of base metal stocks. Read the Fat Prohets report on TAP and then the above headline article in the business section.

Ex Alinta directors financed by Poynton already have aquired 5% of TAP stock and they are now supported by Macquarie.

Get ready for the long awaited 'rumour' of takeover to become, at the very least, an attempt at doing so.

[rub92me]

This is no rumour, look at last Saturdays West Australian.

This is beginning to look very interesting and enough so for me to venture outside my comfort zone of base metal stocks. Read the Fat Prohets report on TAP and then the above headline article in the business section.

Ex Alinta directors financed by Poynton already have aquired 5% of TAP stock and they are now supported by Macquarie.

Get ready for the long awaited 'rumour' of takeover to become, at the very least, an attempt at doing so.
I have looked at the article. You think journalists don't make stuff up occasionally or 'stretch' the facts a little??
1) Until Poynton et al actually tell us how much shares they've bought or it is evident from the share register, it is a rumour, not a fact how many shares they bought.
2) Even if they have bought close to 5%, until they tell us what their intention is, it is a rumour, not a fact that they are planning a takeover.
Doesn't mean it won't happen, just means it has not happened yet and maybe will not happen at all.

[hangseng]

I have looked at the article. You think journalists don't make stuff up occasionally or 'stretch' the facts a little??
1) Until Poynton et al actually tell us how much shares they've bought or it is evident from the share register, it is a rumour, not a fact how many shares they bought.
2) Even if they have bought close to 5%, until they tell us what their intention is, it is a rumour, not a fact that they are planning a takeover.
Doesn't mean it won't happen, just means it has not happened yet and maybe will not happen at all.

Keep reading, more in the West again, this is getting serious and not in a friendly way. They are making their intentions known and TAP board is resisting. Underwood is fighting this in public but Poynton and Macquarie have the money and are buying loads of shares.

Public streetfight seems imminent the way the talking between Poynton and Underwood is heading.

I for one am looking forward to this. Of course along with it I am hoping for a re-rating of the share price. :D

[rub92me]

Well, from TAP's response it appears that they don't want any of it. So unless they'll buy another 70 million shares, they're not going to get anywhere in a hurry...

[rub92me]

Strong rebound today after a bit of a slide the past week. My theory is that the Poynton posse probably sold off their 5 million shares late last week and this week after their half-baked attempt at a coup which temporarily stopped the upward trend. I liked the strong close today, which sets up things nicely for next week. Strong oil prices probably don't hurt either :p:

[hangseng]

Strong rebound today after a bit of a slide the past week. My theory is that the Poynton posse probably sold off their 5 million shares late last week and this week after their half-baked attempt at a coup which temporarily stopped the upward trend. I liked the strong close today, which sets up things nicely for next week. Strong oil prices probably don't hurt either :p:

You may be right.

Tap is quickly increasing after 2 strong trading days and looks like going a lot further. With the recent and forecast increase in oil prices Tap is looking very good indeed.

[Peakey]

I've had TAP in the watchlist for the last month or so....... (not holding).

A couple of things on the chart I noticed were:

Looks very much like a Weinstein setup, heading out of Stage 1 into Stage 2.

TAP is in a sector were alot of the oilers are doing well, price of oil is also helping.

TechTrader has multiple buy signals (green arrows on chart) over the last 6 weeks.

Broken resistance at 1.70ish.

Closed the last 3 trading sessions on the daily high on increasing volume.

180 day moving average is starting to turn upwards.

Looks bullish....

Good luck to those that are already in this one. I may be joining you soon, (kiss of death here I come :D:D:D, don't say I didn't warn you.)

Cheers
Peakey

[hangseng]

I've had TAP in the watchlist for the last month or so....... (not holding).

A couple of things on the chart I noticed were:

Looks very much like a Weinstein setup, heading out of Stage 1 into Stage 2.

TAP is in a sector were alot of the oilers are doing well, price of oil is also helping.

TechTrader has multiple buy signals (green arrows on chart) over the last 6 weeks.

Broken resistance at 1.70ish.

Closed the last 3 trading sessions on the daily high on increasing volume.

180 day moving average is starting to turn upwards.

Looks bullish....

Good luck to those that are already in this one. I may be joining you soon, (kiss of death here I come :D:D:D, don't say I didn't warn you.)

Cheers
Peakey

Loved watching the trading today especially the closing 15 minutes. TAP is about to break strongly upward according to all chart indicators and physical trading action. I got in at $1.87 so I am very happy with this action.

I really hope you theory is correct, TAP could head well over $2.50 again. I would love it to be what it is worth fundamentally, well over $3.00.

[rub92me]

Looks to be hitting a bit of a brick wall at 1.94 - 1.95 again though and volume has dropped off today. Maybe the next attempt will get through? If so this area should become good support.
Oops! looks like it has finally broken through now!

[chrisdedavid]

Good time to disregard the chart and research the company.
Find out why they have increased in value and if they will continue to do this, and maybe plan for other profitable endeavours. :2twocents

I think the chart alone = gamble

[rub92me]

I have researched the company and know about their plans. Whether these plans will come to fruition remains to be seen. Oil & gas exploration is a bit of a hit and miss business. So relying on fundamental research would equally be a gamble, i.e. you're betting on a reasonable success rate of the planned explorations. :2twocents

[kennas]

Probably due for some more consolidation around these levels, but with this momentum looks likely to keep going IMO. Could be a breakaway gap from $2.00 to $2.05 last week...

Any funnymentals worth mentioning here? Where's the upside comming from?

Fat Prophets put a 'BUY' on this at $1.87 recently, but their initial buy was ages ago at $2.72. Not one of their better calls.

Volume pretty encouraging.

[stefoid]

did you read the recomendation? its pretty much all there. plus the oil price heading north doesnt hurt an unhedged producer, either.

[Go Nuke]

Can someone please correct me if I'm wrong but does this look something like a Head and Shoulders formation?

It looks a little out, but i believe it is one.

Cheers
GN

[Rainmaker2000]

I've scoped TAP out for years and owned it off and on....I've always wondered why its price goes round like a yo yo..which I benefited from..I suspected there were many 'technical' investors on board...after seeing all these posts, its pretty much confirmed..hehe.......Anyway, especially the chartists would want to know that this is a dirt cheap, unloved company which has always refused to pay a dividend or buy back its stock substantially...... no doubt its a takeover target sometime with the secret trinkets of the company being is years of unused franking credits which can be used to placate any resisting shareholders.......If it has one decent oil find, that would rerate it as well

[kennas]

Can someone please correct me if I'm wrong but does this look something like a Head and Shoulders formation?

It looks a little out, but i believe it is one.

Cheers
GNGN, technically, yes, it is a H&S but as you say a little crooked. Still qualifies though. I'd say a pretty low probability of that panning out though unless POO gets smashed and the markets really crash. Support between 1.40-60 looks pretty strong.

[The Mint Man]

Hey guys,
I posted the following in the OSH thread but I think that this would be of interest to you as well because TAP was mentioned/shown on the programe.

If you missed Lateline Business last night then you will want to watch it here http://www.abc.net.au/reslib/200709/r184144_683326.asx
OSH was the lead story, first up and got quite a wrap... very good exposure:D I think I will be holding on for the ride somehow;):eek:
Just so you know, the link above is for broadband, windows media player.

If your not the video type though I have supplied the transcript below



Shares in Oil Search surge

Australian Broadcasting Corporation
Broadcast: 17/09/2007
Reporter: Neal Woolrich

Rumours of Chinese interest in another Australian resources company have seen its shares soar today.

Transcript
ANDREW ROBERTSON: Rumours of another Chinese interest in Australian resources companies have seen shares in Oil Search soar today. The company rose nearly 12 per cent on reports it could be the target of a $6 billion takeover from a Beijing-backed energy giant. Oil Search denied the claims, but analysts say the company's proven reserves could make it very attractive. Neal Woolrich reports.

NEAL WOOLRICH: The ink is barely dry on Woodside's $35 billion gas sale to China and now the economic powerhouse is rumoured to have another Australian energy source in its sights. Newspaper reports say the China National Petroleum Corporation and Petro China are considering a $5.9-billion bid for Oil Search. The company says it's had no formal takeover approach from any party, but analysts argue that Oil Search would make an attractive target.

HOWARD ELTON, INERSUISEE: A number of oil and gas companies would be looking at Oil Search as a company that has got some substantial reserves and that is worth doing some real in depth research.

CARLO CAIANI, CAIANI & CO: It's a very good mid-sized oil and gas asset. BHP Billiton, among others, had been looking at it for a while. We're surprised actually it hasn't gone before. It's got production at about 10.5 million barrels of oil equivalent.

NEAL WOOLRICH: The takeover rumours sent Oil Search's share price climbing by 11.5 per cent, and helped Tap Oil gain 5 per cent, and AED more than 3 per cent.

HOWARD ELTON: Oil Search is much more significant in scale than Tap, which has a more modest-sized oil fields in Western Australia, and AED, which is a very niche operator that's just about to start producing in the Timor Sea. They may find more oil, but they're not of the scale at this time, that Oil Search is certainly.

NEAL WOOLRICH: Carlo Caiani says Oil Search is now trading on a price earnings multiple of more than 60, and the rumour of a bid for the company is another sign that the Chinese are willing to overpay for assets.

CARLO CAIANI: I wouldn't say desperate. They're willing to overpay. They import about 50 per cent of their crude oil requirements. That is set to increase over time, and essentially they're going to have to just overpay for assets to secure the energy requirements. It's as simple as that.

NEAL WOOLRICH: A bid could come at the top of the market with some analysts forecasting a fall in commodity prices because of a slowdown in the US economy.

CARLO CAIANI: That will have a far greater effect on the world economy than most people think. We do believe that a number of mineral commodities; copper, zinc; the base metals, nickel will go down quite hard. Iron ore we think will go down whether it's next year or the year after depending on negotiations.

NEAL WOOLRICH: Investors are now pinning their hopes on the US Federal Reserve giving the American economy a much-needed boost. The Federal Open Market Committee meets again tomorrow and is expected to deliver an interest rate cut of at least a 0.25 per cent.

Let us know your thoughts.

Cheers:D

[rub92me]

I don't think the Oil Search rumours contributed much if any to the TAP sp rise yesterday. Price didn't start appreciating until the Maitland-2 announcement came out, which was excellent news by the way..

[rub92me]

Another interesting substantial holder revealed (in addition to the illustrious 'Group of TAP Shareholders') - Eley Griffiths Group now holds just over 5%. From their website:

Eley Griffiths Group Pty Limited (‘EGG’) is a boutique fund manager specialising
in Australian small companies. It is jointly owned by Brian Eley and Ben
Griffiths, former small companies’ portfolio managers at BT Funds Management and
ING Investment Management.
EGG has a commitment to excellence in the management of small company
portfolios, and the managers have extensive experience in this area. The
business operates an outsourced service provider model, which allows the
principals to concentrate their time and energy on portfolio management and the
discovery of stocks that, in their opinion, have been inefficiently valued by
the market.

[rub92me]

Great announcement out today - TAP acquiring 40% rights in underexplored prospective acreage in Brunei. Now all we need is some decent testing results from Maitland 2 in October, the price of oil staying high and the market in general not tanking and it's all looking rosy again! ;)

[rub92me]

Looks like it is breaking out today; trading above 2.18 for the first time in more than a year on high volume. Some more good announcements in the past week on forward gas sales seems to have given some confidence. One of the major shareholders has been selling down over the past months though.
Also expecting some more news on the Philippines 3D seismic results soon which will give us a better idea of what targets they managed to identify there...

[rub92me]

High volume for 3 days in a row and climbed to around 2.30 now after the breakout. Lots of bot buying going on and especially today plenty of big parcels (>100k shares) changing hands. Expect to see some changes in significant holders soon.

[sfx]

A few institutions selling down on this one - UBS being one of the bigger ones...

I hope this doesn't signal any future bad news that the fund managers 'know' about. Probably just regular fund adjustments and shifting of funds ?!?

Comments?!

[hector]

A few institutions selling down on this one - UBS being one of the bigger ones...

I hope this doesn't signal any future bad news that the fund managers 'know' about. Probably just regular fund adjustments and shifting of funds ?!?

Comments?!

I read in The Advertiser that profit taking was occurring this week with oil stocks despite the rising oil price. I don't understand a lot of things in the market and I can't explain that either.

I see a rising share price, a present retracement, and continue to hold with an expectation of a future rise. If I'm proved wrong - then I'll sell.

[sfx]

I read in The Advertiser that profit taking was occurring this week with oil stocks despite the rising oil price. I don't understand a lot of things in the market and I can't explain that either.

I see a rising share price, a present retracement, and continue to hold with an expectation of a future rise. If I'm proved wrong - then I'll sell.

Yeah a bit of profit taking by the insto's.

However, on the back of a market drop, TAP too suffered a big dive today down 0.18 cents to $2.27.

[rub92me]

TAP keeping its ground due to high oil prices perhaps. Yesterday saw quite a high volume sell off once it threatened to break out past 2.60, but found support again today. I'm keeping mine unless it looks like support around 2.30 won't hold. UBS must have pretty much sold out by now, and TAP are unhedged so high oil prices more than offset the strong AUD for now.

[michael_selway]

TAP keeping its ground due to high oil prices perhaps. Yesterday saw quite a high volume sell off once it threatened to break out past 2.60, but found support again today. I'm keeping mine unless it looks like support around 2.30 won't hold. UBS must have pretty much sold out by now, and TAP are unhedged so high oil prices more than offset the strong AUD for now.

Hi it looks quite expensive still

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 0.5 2.7 7.3 8.8
DPS 0.0 0.0 0.0 0.0

thx

MS

[rub92me]

Hi it looks quite expensive still

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 0.5 2.7 7.3 8.8
DPS 0.0 0.0 0.0 0.0

thx

MS
If you use EPS as the main/only measure of value for Oil Producers & Explorers then maybe it looks quite expensive. Imho that's not a very useful way of assessing the value though...More important to me are debt levels (none), share dilution (none, in fact they've bought back shares), exploration targets, etc.

[doctorj]

Using EPS to value an explorer is like using the colour the sky to estimate the temperature. It doesn't follow...

Better off looking at 2p reserves and cash.

TAP has about $100m in cash from memory. Plus more 2p reserves are potentially on the way assuming success at Maitland.

[rub92me]

Recovered nicely today from the slightly disappointing news from Woollybutt 6. Still, there's bigger fish to fry for TAP in the future according to their presentations. Hopefully at least one of these will be a success, they haven't had the best of luck in the past 2 years.

[sfx]

Recovered nicely today from the slightly disappointing news from Woollybutt 6. Still, there's bigger fish to fry for TAP in the future according to their presentations. Hopefully at least one of these will be a success, they haven't had the best of luck in the past 2 years.


Indeed - the SP has increased and stayed somewhat more steadier than other oil shares (esp AED).

I was looking through their announcements etc, and was wondering of what upside is due for announcement?! Can anyone elaborate?

I expect this one to sky rocket, as I've sold out of it. Its wise investment strategy to bet against me.... hehehee

[tronic72]

Indeed - the SP has increased and stayed somewhat more steadier than other oil shares (esp AED).

I was looking through their announcements etc, and was wondering of what upside is due for announcement?! Can anyone elaborate?

I expect this one to sky rocket, as I've sold out of it. Its wise investment strategy to bet against me.... hehehee

Tap is currently overpriced IMHO. It's a well run but small company. I had it a while ago at 1.60 where it sat for ages. I think it will go down before it goes up as it's already had a decent run.

[rub92me]

Tap is currently overpriced IMHO. It's a well run but small company. I had it a while ago at 1.60 where it sat for ages. I think it will go down before it goes up as it's already had a decent run.
Overpriced based on what? They have 3 potential 'company changers' lined up for the next 6-12 months that could double or treble their gas and oil reserves. It has had a decent run and it's currently consolidating. Don't know where it will go in the near future, but still has enough potential upside for me to hold for a while.

[RichKid]

Below is an extract from the marketing email Fat Prophets (Mining) send around, it is from today's email- 28 November 2007.

I'm trying to ID if this is TAP or another stock. FPM often entice the market by providing clues, probably to get more people on to a stock that their subscribers are already riding. I don't hold TAP atm but it's a stock that's been on my watchlist over the years.

TAP is a stock that's been in the FPM portfolio before so I wont be surprised if it is the one described below, I have also found part of an old review which confirms some of the details, might need updating though. I have looked at ARQ, AWE and OSH but their sp figures don't match the dates given below. If this is another co let me know and I'll shift it to that thread. I currently view this pattern in TAP as a consolidation pattern with distribution currently taking place according to the price/volume data.

In EW terms it appears to be a w4 in the short term- often typified by sideways consolidations into rectangular or triangular formations, as we have here (depends on the count you prefer from the two I have below and on how prices travel over the next few weeks).



No Other Oil Company Offers A Better Potential Pay-Off size

Then there's oil. With the oil price hovering around the US$100 a barrel mark, we are constantly on the look-out for excellent quality oil stocks to recommend to our Fat Prophets Members.

We think we've recently found almost the perfect Australian oil company that will be able to prosper from both the strong oil price and its ongoing aggressive exploration budget.

In our most recent report to Fat Prophets Members, we said…

"In our view, no other oil company offers Members the potential pay-off…should it hit the jackpot with its exploration and development well-drilling program."

"With such as aggressive exploration program supported by a strong balance sheet, and the added spice of possible corporate activity, we believe the prospects for (this company) are better than they have been for many years."

From a charting perspective, we said…

"Given the clear revival in longer-term upward momentum, we believe the company retains the potential for further gains in the coming months."

We concluded our report by recommending our Members BUY the shares at around $2.42*.

Even though that recommendation was rushed to Members 2 weeks ago, the good news is that today the shares still trade around the $2.40* level

That means people who sign up today to become a new Fat Prophets Member can buy the shares at the same level we were happy to recommend them as a BUY 2 weeks ago.

That sort of opportunity doesn't come along very often.


From ETrade (googled) https://www.etradeaustralia.com.au/Products/IndustryResearch/FatProphets.asp?Page=DOG&Issue=Cattle+Dog%2C+Fat+262

Issue Date 27/07/2007
Back Issues
Dog of the Week

Issue Date 18/01/2006
Back Issues
Tap Oil - The Cattle Dog (Running Now and Will Run All Day).

Tap Oil (TAP) has established a solid production base on Western Australia's North West Shelf and is looking to expand its exploration and production interests in New Zealand. The company is a high quality mid-cap oil producer, with an enviable track record of profitability and exploration success. Tap has aggressive exploration activities in place, comprising an extensive well-drilling program that is aimed at significantly increasing its reserves position.

Financially, the company is generating strong cash flow from robust oil prices, maintains a cash position of close to $100 million and has no debt. Adding to the bullish outlook is the fact that Tap is highly leveraged to the oil price with minimal hedging in place. With investors having significant exploration exposure through its drilling program, upside potential remains.

The charts attached below give an idea of the trends and patterns from my perspective. I have not added all the trend or channel markings as it'll clutter up the chart. Note the buyer support gap or cushion between the current pattern and previous resistance circa 2.15/2.20.

[Uncle Festivus]

Gone a bit quiet in here, time to revisit the technicals?
The weekly chart seems to be forming a double bottom with higher lows of the last 3 weeks now, also bouncing off previous support levels.
Pos - $100m cash, t/o potential?
Neg - production problem sorted yet?

[Uncle Festivus]

Mmmm..... must only be me noticing something odd happening with TAP the last 2 days. Are we to be finally rewarded with a takeover?

[rub92me]

Mmmm..... must only be me noticing something odd happening with TAP the last 2 days. Are we to be finally rewarded with a takeover?
Have been out of this for a while, but still on the watchlist. The upmove is on low volume, but it is a bit strange as they haven't reported yet that the production problems have been resolved. Maybe worth another bite.

[rub92me]

TAP has not benefited much from the rise in oil price due to ongoing problems with their oil production on Woollybutt. The recent gas explosion at Varanus may also impact revenues in the short term and not sure to what extent they are covered by insurance. On the positive side, Woollybutt production is about to recommence with increased production from the South lobe, and we should be hearing any day now about the huge Marley gas prospect. If the latter is positive I may jump on.

[Trader Paul]

:)

Hi folks,

TAP ..... price running into a v-bottom, with a hammer and
rising volume over the past couple of sessions, ahead of
2 positive time cycles expected around mid-week .....

..... hopefully some positive news will be enough to lift
TAP off its lows ... :)

Updated TAP chart, below.

have a great day

paul

:)

=====

[rub92me]

On my radar again at current shareprice. They still have a good cash position and regular income from gas and oil sales. They really need a solid new discovery in the next 6 months though. Fingers crossed for (initially) Brunei.

[Trader Paul]

:)

Hi folks,

TAP ..... it has been a while, since this one has surfaced on the radar.

..... it has not had any news this month and technically, it looks primed
for a run up, soon ... ???

Updated TAP chart, attached below and expect TAP to be booming,
around 17022010 ... :)

have a great day

paul

:)

=====

[DVEOUS]

No posts about TAP Oil since March?
Is this an unloved stock??? :confused:

I'm really trying to decide whether to get into TAP or OEX Oilex.
Would like to have an oiler as a short-term play.

[nooberator]

Tapoil (TAP) is currently in a trading halt which ended friday close
so come monday should i blow my life savings?

They are aquiring some company in thailand

(this is where i reference the article, but cause I dont eminate enuff 'cool' the forum wont let me)


What does this 1 for 2 mean? is this good or bad or neutral?

Eligible Retail Shareholders will be invited to participate in the 1 for 2 Retail Entitlement Offer on the same terms as the Institutional Entitlement Offer. The Retail Entitlement Offer may raise up to A$32 million. The Retail Entitlement Offer will open on Thursday, 21 October 2010 and close at 5.00pm (Perth time) on Monday, 8 November 2010.


Half yearly report

$66 mill cash and no debt,(sounds good) i didnt bother to read the whole thing, its 31 pages. but I really like what they did with the bullet points and the bold, personally i would have chosen a font such as 'Silian Rail'.

(this is where i reference another article, but cause I dont eminate enuff 'cool' the forum wont let me)

[oldblue]

Here's the latest release to the ASX.

http://www.asx.com.au/asxpdf/20101015/pdf/31t4zyy0xx2nlz.pdf

Shareholders will be able to subscribe for one for every two shares currently held. The price isn't specified yet but will be the same as that at which the institutions successfully tendered for their part of the issue.

An interesting feature, which is becoming fairly common these days, is that holders may apply for more than their entitlement if they wish. Expect heavy scaling back if the offer/price looks attractive.

Note that the period that the offer is open is quite short.

I havn't held TAP for several years - and not very successfully then - so I don't offer an opinion on the merits of either the company or the issue.

[WaveSurfer]

Can't find a thread dedicated to this one, so here we go.

Have been watching this one churn for the past couple months. Looking for a break of this congestion zone (possible accumulation) on healthy volume and a test/no supply for entry. Would also consider taking a spring or shakeout of this current low for a punt on it heading back to the highs of the range.

This was released today Tap Increases Its Interest in WA-351-P (http://www.asx.net.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01143100). Not that I take much notice of the news.

[qldfrog]

jumped this week from 80c to $1: was underrated IMHO before and moving toward more realistic value.
I do hold...

[Miner]

who else is following TAP ?
Big announcement today after trading halt
Market did not even react . I thought it was real goody but who listens to me.
The followers of TAP - could you please throw some light if the big discovery of gas has any relevance for market upside ?
What is wrong with TAP ?

[Pinnacle]

When you look at the announcement:To date the well has intersected over 100m of gas bearing sandstone (true vertical thickness)
I would think that is significant & over the past few weeks I have noticed that there have been quite a few single purchases over 100,000 units. I have recently purchased & will hold as the take up of WA-351 also looks compelling!

[Miner]

When you look at the announcement:To date the well has intersected over 100m of gas bearing sandstone (true vertical thickness)
I would think that is significant & over the past few weeks I have noticed that there have been quite a few single purchases over 100,000 units. I have recently purchased & will hold as the take up of WA-351 also looks compelling!

thanks for the encouragement. Market dived down again today. Who could predict it :banghead:

[Chief Wigam]

Wow this announcement is fantastic!!!!!!!!!!!!!!!!!!!!!!!!

They have quoted an upper range of 2 TCF.

Which, for TAP's 10% share is equal to 40c/share, if you use 50c per Mscf (industry standard).

[Miner]

Wow this announcement is fantastic!!!!!!!!!!!!!!!!!!!!!!!!

They have quoted an upper range of 2 TCF.

Which, for TAP's 10% share is equal to 40c/share, if you use 50c per Mscf (industry standard).

Chief

Can you please throw some more light for the dummies to understand your calculation /
Cheers

[Chief Wigam]

This recent price drop is temporary, surely. Zola is worth at least 40c to TAP and yet the share price has retracted close to where it was before the announcement.

Zola will surely be factored into the share price soon when the market wakes up.

Miner, just saw your post; here is the calc:

if you use 50c per Mcf , then 2 TCF = $1,000,000,000.

TAP share is 10%, so $100,000,000

TAP's curent market cap is $220 million at 91c, so 100/220 = 0.45

So 91c x 0.45 = 0.41c

[Miner]

This recent price drop is temporary, surely. Zola is worth at least 40c to TAP and yet the share price has retracted close to where it was before the announcement.

Zola will surely be factored into the share price soon when the market wakes up.

Miner, just saw your post; here is the calc:

if you use 50c per Mcf , then 2 TCF = $1,000,000,000.

TAP share is 10%, so $100,000,000

TAP's curent market cap is $220 million at 91c, so 100/220 = 0.45

So 91c x 0.45 = 0.41c

Thanks a lot

[oldblue]

This recent price drop is temporary, surely. Zola is worth at least 40c to TAP and yet the share price has retracted

I think the market is right to take a cautious view towards Zola at this early stage. After all, TAP said the discovery could be at the upper range of 1-2 TF. (My emphasis)

TA-wise, TAP's not a buy yet for me while the downtrend continues and RS remains weak.

:cool:

[Chief Wigam]

Hartleys have done a valuation on WA-388-P and have stated :

"Oilex has identified several prospects ranging in size, up to 2.8 trillion cubic feet of gas. An 8.4% working interest in a successful discovery of 2.8 trillion cubic feet of gas would result in 235 billion cubic feet of gas net to Oilex. Using a conservative valuation of $0.50 per thousand cubic feet implies a value of A$117m or 53cps for Oilex. This does not include the potential of any associated liquids or the likelihood of additional discoveries from the other numerous prospects on the block."

See the announcement in late November. It seems this is currently going unnoticed by the market. Probably a good time to accumulate.

[Chief Wigam]

"The Intelligent Investor has a speculative buy on tap up to $1.05, and a hold up to $1.50

I think that is a fairly good assessment. Plenty of upside here."

[pixel]

"The Intelligent Investor has a speculative buy on tap up to $1.05, and a hold up to $1.50

I think that is a fairly good assessment. Plenty of upside here."
On the other side, today's candle may resemble a bottom reversal doji, just as the one on the 3rd did. I took the follow-through on the 4th and 5th as invitation to buy, only to be stopped out a day later. Won't risk the same mistake a second time. And the way Crude (mis-)behaves tonight, I'm not holding my breath for "this time it's different..."

42887

[Chief Wigam]

Quote from Intelligent Investor:

"According to management, Zola holds reserves at the larger end of pre-drill estimates. But even at 1Tcf it would be worth about 44c per share. A 2Tcf discovery could be worth more than 60 cents. If Zola turns out to be commercial, it will be a genuine company changer that bodes well for other prospective areas in the exploration portfolio."

[oldblue]

Hi Chief.

There's a few "coulds" and "ifs" there but the reality is that meanwhile, TAP just isn't a Buy, technically speaking.

Plenty of time to buy them once the SP downtrend reverses.

:cool:

[Chief Wigam]

http://www.theage.com.au/business/tap-oils-lucky-hand-20110606-1fodp.html
Oil's lucky hand
Nathan Bell
June 6, 2011
Poker aficionados know that luck plays a part in success. They also know that the best players take advantage of chance and manipulate probabilities to their benefit. That's what makes poker a game of skill rather than luck.
Hunting for oil and gas is much the same. Luck plays its part in the outcome of an individual prospect but, over time, the skill of the driller is more important.
Over the past five years, Tap Oil has lacked luck and skill, spending almost $200 million trying to increase its reserves without much success. The share price has sagged as a consequence.
Now a new management and improved exploration teams are reinvigorating the company. Modest ambition and extreme conservatism - appropriate in most industries except this one - have been replaced with aggression and élan.
Tap has so far made two significant acquisitions, ventured into new turf and, most recently, done what many imagined was beyond it - made new discoveries.
In February the company confirmed gas at Zola, a large structure it was drilling with US-based Apache in the Carnarvon Basin off Western Australia. Pre-drill estimates suggest it could hold between 1 and 2 trillion cubic feet (Tcf) of gas which, to be technical, is a lot.
According to management, Zola holds reserves at the larger end of pre-drill estimates. But even at 1Tcf it would be worth about 44 cents per share. At the moment, the market isn't attributing anywhere near that much to the discovery.
If Zola turns out to be commercial, it will be a genuine company changer. The gas could be quickly plugged into nearby LNG developments or fed into the lucrative WA gas market. It also bodes well for other areas in the exploration portfolio.
Good luck has struck not once, but twice. Tap and its partners have made a small oil discovery known as Finucane South. Although it's only perhaps 8 million barrels, it could add a further 10-15 cents to Tap's share price.
Better days
These two new discoveries alone justify some excitement but Tap's exploration portfolio adds a little extra. The company recently purchased additional equity in a Carnarvon Basin prospect with the rather dull moniker of WA-351-P.
Operated by BHP Billiton, it's one of the most attractive prospects in the lucrative waters off the coast of Western Australia. High quality seismic surveys and nearby success for US energy giant Hess suggests this is as good as offshore drilling gets.
In fact, BHP itself has swooped in to buy the additional equity from Tap, gifting the smaller company a quick profit and highlighting the excitement that surrounds the permit, of which Tap now owns a 20 per cent stake.
Tap has also secured new exploration ground off the coast of West Africa, where several large oil discoveries have been made by other explorers. The targets here are relatively big - up to 200 million barrels of oil - but a good dose of luck and skill will be required for Tap to make something of them. This area will be risky drilling but the potential is exciting.
So why is the market discounting Zola when energy prices are soaring? One explanation is that it's located next door to the giant Gorgon gasfield, where a high level of carbon dioxide has delayed development for 30 years. A similar problem may stifle the development of Zola.
Similarly, WA-351-P may look sensational on paper, but Tap's old foe - luck - may decide the final outcome. Tap's fortunes might have changed but the laws of risk and reward haven't.
Legal dispute
A legal dispute also weighs on the company's fortunes. Tap is part of a joint venture being sued by customers for failure to deliver gas following the Varanus Island gas explosion in 2008. Tap could find itself liable for tens of millions of dollars in damages.
Despite these woes, this is a company in better shape now than it has been for years. Assuming a favourable outcome at Zola, the share price could go much higher and the threat of legal action is more than offset by new discoveries and exploration potential.
This small oil and gas explorer, despite its patchy past, is worth a look, but only for those willing to bear all the usual risks that accompany oil and gas exploration.
This article contains general investment advice only (under AFSL 282288).
Nathan Bell is research director of The Intelligent Investor. BusinessDay readers can enjoy a free trial offer. For more Intelligent Investor articles click here.


Read more: http://www.theage.com.au/business/tap-oils-lucky-hand-20110606-1fodp.html#ixzz1ObM8gpWf