Low oil price would not unduly impact IPB’s Idris well

By Trevor Hoey. Published at Apr 30, 2020, in Energy

It pays to keep an eye on stocks that have been oversold in the wake of oil price volatility, particularly those at the smaller end of the scale.

It was only a fortnight ago that shares in IPB Petroleum Ltd (ASX:IPB) stacked on 200% in a matter of days.

The company released its quarterly activities report for the three months to 31 March, 2020 on Thursday, flagging some important news that could see its shares continue their strong run.

IPB has continued to progress discussions and information exchanges with potential farm-in partners, debt financiers, intermediaries and their representatives.

During the quarter, IPB received a non-binding term sheet for full funding of the Idris well offshore Western Australia with farm-in from one party.

The principal activities of IPB Petroleum centre on conventional hydrocarbon exploration and associated activities relating to its three exploration permits along the southern margin of the Browse Basin offshore north-west Australia as shown below.

Additional economic analysis proves positive

Management remains in discussions with the relevant party, as well as with other interested parties and intermediaries, despite delays associated with COVID-19 and a low oil price environment.

Further economic analysis and study work was completed in the March quarter.

Scenarios of a Phase 1 and Phase 2 development, based on success with the proposed Idris appraisal well, were also completed and provided to potential financiers and farminees.

It is important in the current environment to note success at the proposed Idris well supports economic profitability at relatively low oil prices on a most likely basis.

Should these discussions result in the ratification of firm agreements this would be a significant share price driver for the group.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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