With oil prices surging, many investors are seeking exposure to ASX oil shares.
While Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) are popular options, they are not the only ones out there.
In fact, Bell Potter has just initiated coverage on one speculative oil share and has good things to say about it.
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Which ASX oil share?
The share that Bell Potter has been running the rule over is Omega Oil & Gas Ltd (ASX: OMA).
Bell Potter has described the investment opportunity here as a geology-led unlock of an unconventional oil and gas play.
Commenting on the company, the broker said:
OMA is taking a geology-led approach to unlocking a significant new unconventional oil and gas play in Queensland's Taroom Trough. Its acreage is located within 50km of existing gas pipelines and 150km from the Wallumbilla Gas Hub. In 2025, the Canyon-1H (horizontal) well flowed oil at peak daily rates of 452bbl oil and 0.60mmscf gas. SLB's (Schlumberger) Estimated Ultimate Recovery for a 2,000m horizontal well is 0.95mmboe with OMA's estimated potential gross wellhead revenue of $93m; at the time of assessment, OMA's acreage could accommodate up to 418 wells.
OMA's most recent 2C Contingent Resource estimate of 1.7tcf (October 2023) does not yet incorporate this latest technical success and geological data. OMA is also working adjacent joint venture acreage with its major shareholder Tri-Star and Beach Energy (BPT, Hold, Target Price $1.15/sh), and has a 19.08% interest in Elixir Energy (EXR, not rated) which is operating on the western flank of the Taroom Trough.
Initiation with buy rating
According to the note, the broker has initiated coverage on the ASX oil share with a speculative buy rating and $1.45 price target.
Based on its current share price of 85 cents, this implies potential upside of 70% for investors over the next 12 months.
Commenting on its recommendation, Bell Potter said:
OMA is leveraged to de-risking of a new unconventional oil and gas play located close to Australia's east coast energy markets. Over 2026-27, OMA's appraisal program should add significant scale to current its current Resource position and inform initial Reserves and production parameters. Australia's east coast gas market is attractive with established basins in decline, limited sources of new supply and secure demand from domestic and export customers. Oil prospectivity provides another strategic element to the OMA value case.
