With the news that Woodside Petroleum (ASX: WPL) will pay shareholders a special, fully franked dividend of 63 cents a share — and the shares up 8% today, as of this writing — many investors are motivated to take a closer look at some of the ASX’s most promising oil and gas companies. Here are details on two such plays.
A MAD success?
Since it’s share-market debut in 2010, Maverick Exploration & Drilling (ASX: MAD), with its operations concentrated in Texas oilfields, has outperformed the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) handsomely — by some 200 percentage points. Just take a look at the chart below.
And the shares could still be cheap, trading at an enterprise value to BOE (barrels of oil equivalent) of around $2. The question for investors is whether they prefer to concentrate on this metric versus the company’s current production, which as of March has risen to over 1,000 barrels of oil per day. Focusing on the latter may be a mistake and could cause investors to underestimate this company’s value.
In search of oil and gas
Headquartered in Port Moresby, Oil Search Limited (ASX: OSH) operates all of Papua New Guinea’s currently producing oil and gas fields, and also has interests across the Middle East and Africa. The company’s oil production profile remains strong, even with an unplanned shut-down in 2012. For that year, net profits after tax amounted to over $170 million, “underpinned by stable oil prices” according to a recent investor presentation.
What’s more, its PNG LNG project, with key partner Santos Limited (ASX: STO) is over 80% completed and on track for first LNG sales in 2014.
The chart below shows Oil Search’s performance against the S&P/ASX 200 index over the last five years.
The bottom line is: Limited oil supply and growing demand mean oil prices are likely to rise over time. Position yourself to profit from this trend — and get 3 more investment ideas right now! — with The Motley Fool’s FREE research report, “3 Oil Stocks to Send Your Portfolio Gushing Higher”.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Catherine Baab-Muguira does not own shares in any of the companies mentioned in this article.
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