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Gold/Mining/Energy : The Oil & Gas Elephant Hunt

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To: lazarre who wrote (266)	6/4/2007 12:59:22 PM
From: Brinks	Read Replies (2) of 310

Marion was up 14% last night. Based upon large insider buying and its first ever reserve report due out around July 15 I would not be surprised to see the stock double from here. Australian stocks focused on U.S. are totally ignored. This one has a great management team IMHO. Paterson analyst report can be obtained by going to www.marionenergy.com.au finance.yahoo.com 3 month chart finance.yahoo.com Analyst Report Patersons (Australian) Real Assets--About to see real earnings May 22, 2007 "We estimate that MAE is sitting on a large gas resource ( 200+ BCF) at Clear Creek, and circa 50+ BCF at Helper. U.S. market transaction data confirms why MAE is an asset play---and should MAE be successful in redeveloping Clear Creek/Helper/Jester Bloomington---it could have net reserves (2P) of 300+ BCF. Based on market transactions--MAE could potentially be worth around $ 800M ($2.70 share plus). We have also compared MAE to its Australian listed USA operating peer group (page 14). In terms of earnings, we are looking for A$108m on revenue line in FY 2008. NPAT of $ 39.8m, with EPS of 15----this places the stock on 4.1 times earnings. Relative to others Aussie's in the U.S.--the stock looks very good value." There has been significant recent insider purchases: asx.com.au asx.com.au asx.com.au Marion Energy Has What it Takes By Rudi Filapek-Vandyck Following on from our story earlier today (Re-Rating Ahead for Marion Energy) we can now report that stockbroker Intersuisse has joined the ranks of local equity specialists with a positive view on developing gas producer Marion Energy (MAE). In a report published today analyst Peter Arden says he believes the market does not yet fully recognise the potential gas reserves and production that Marion Energy has, especially in the major Oklahoma and Utah regions. Similar to a view expressed by Patersons in our earlier story from today, Arden would expect the shares to be re-rerated as the company "continues to bring on significant amounts of production and releases the long-awaited reserves certifcation report." The reserves certification report the Intersuisse analyst is referring to is a so-called Independent Engineers Reserve Report which is expected to be released by the end of July. It is expected this report will demonstrate the "substantial nature" of marion Energy's gas reserves as well as the company's production potential. Management at Marion Energy expects to have gas production from up to four wells at Clear Creek, seven wells at Helper and in excess of 15 wells in Oklahoma within the next few months. Intersuisse believes the company's projects over the next few years should be readily funded by the company's cash reserves, debt facilities and its growing operating cash flow. It is the brokers view that the U.S. is increasinly facing a tightening gas supply situation and that the country will be forced to rely on more on imported gas via Liquefied Natural Gas (LNG). This should create a favourable trading environment for the likes of Marion Energy. The broker recommends the stock as a "speculative buy for longer term investors with an appropriate risk profile that includes an appreciation of the volatility and risks for smaller energy companies." The broker sees "significant share price upside" for Marion Energy over the next few years..

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