Looking to buy a promising S&P/ASX 300 Index (ASX: XKO) energy share tipped to deliver outsized near-term gains?
Then you may want to have a look into Amplitude Energy Ltd (ASX: AEL), formerly Cooper Energy.
That's according to Wik Farwerck, portfolio manager of the Balmoral Investors micro-cap fund (courtesy of The Australian Financial Review).
Asked which stock his fund owns that he believes has the most near-term upside, Farwerck said, "ASX-listed Amplitude Energy has a good chance, given the catalyst-rich environment it has in front of it."
Noting two reasons the ASX 300 energy share could surge in the coming months, he said, "As an east coast gas producer, it has exposure to rising gas prices, exploration in the Otway and improving volumes from its Orbost gas plant.
Amplitude Energy shares have already enjoyed a strong run over the past 12 months, gaining 44%.
And Farwerck believes the stock can deliver more outperformance ahead.
Why this ASX 300 energy share is a buy
Among the reasons Farwerck is bullish on Amplitude Energy is the increasing realisation that the world will need gas for a very long time yet to keep the lights on.
He noted:
Increasingly, it is dawning on regulators and even politicians that gas is not a transition fuel; it's simply a fuel, and a crucial one at that. It is vital to the economy for heating, industrial processes and electricity.
As existing gas fields deplete in Bass Strait and from a lack of investment, primarily due to regulatory and government policy settings, we face the potential of much higher gas prices.
And the ASX 300 energy shares is well-positioned to take advantage.
"Amplitude has strategic value in its existing gas plants in Victoria, as the ability to get approvals for new infrastructure appears impossible," Farwerck said.
He added:
The current Otway drill program by ConocoPhillips (NYSE: COP) is looking promising, but the proponents have limited processing options, hence the value of the Athena gas plant owned by Amplitude.
In his bullish appraisal, Farwerck also echoed legendary investor Warren Buffett, who famously said, "A great manager is as important as a great business."
Farwerck noted, "Amplitude has a strong management team that has turned the business around, reset the cash generating base for earnings and set the company up for growth."
Then there's Amplitude's recently completed $150 million equity raising, which will help to support its East Coast Supply Project (ECSP) expansion.
"The recent capital raising has placed the company in a great position," Farwerck said.
Rounding off with the fourth reason to buy this ASX 300 share today, he concluded, "The stock looks attractively priced for a business with contracted volumes and with upside to gas prices."
