Rumour Lifts Peko Oil Share Price

Sydney Morning Herald

Tuesday February 23, 1988

By ROFF SMITH, Resources Writer

Speculation that the Jabiru-7 oil well in the Timor Sea has found a promising oil column, coupled with high hopes for the soon-to-be-drilled Delta-1 wildcat well, has driven up Peko Oil Ltd's share price in heavy trading over the past few days.

More than 1.2 million shares were traded yesterday at prices ranging between 95c and 98c - down slightly from Friday's close but well up on last week's prices in the mid-80c level. Peko closed yesterday at 96c.

"The shares were run up pretty hard on Friday and again today," said one dealer. "Most of the interest came on rumours that Jabiru-7 found oil."

The market has focussed on Peko because it is the only company to have an interest in nearly all of the permits in the Timor Sea.

There have been rumours that a modest pool of oil has been found at Jabiru-7 which would extend the size of the field. It is understood that the joint venture partners have been testing the well and analysts expect an announcement sometime later in the week.

Most believe that the oil pool - if the rumours are correct - will be relatively modest. After the premature hoopla that erupted in the wake of the first Jabiru discovery in 1983, few analysts are willing to speculate about reserves.

Geologists are attaching more importance to the fact that oil was found, rather than the size of the find.

The Delta-1 well, in ACP-1, is described as a pure wildcat. It will probe the cretaceous sediments of one of the largest structures yet found in the Timor Sea. The structure extends into an adjacent permit, ACP-3, giving rise to hopes of a large field.

Analysts are quick to caution, however, that while the structure may be large, there is no guarantee that it contains anything of interest.

In the past few months, the Timor Sea has become the focus of the Australian oil industry's exploration hopes. With Bass Strait reserves dwindling down and the ever decreasing chances of a major find on shore, explorers are committing more and more funds to probe the highly complex basins off the north west coast. This year 20 wells are scheduled to be drilled on the Timor Sea.

© 1988 Sydney Morning Herald

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