Seven scrapes oil and gas sector
One Australian billionaire thinks the next big payday will come from the oil and gas sector.
As many investors move away from the fossil fuel energy sector, Seven Group Holdings’ chief Kerry Stokes is getting on board.
Seven has been buying-up considerable shareholdings in two oil and gas production and exploration companies, which operate in the Cooper Basin on the South Australia and Queensland border.
From trades in the last few weeks, Seven now holds around $150 million in Beach Energy shares, and $10 million worth of Drillsearch shares.
Beach Energy spokesperson Chris Jamieson said there were good reasons to buy in.
“I think in April [our share price] had hit $1.80 and recently we hit $0.88,” Jamieson told the ABC.
“When you have that sort of reduction, which is driven really by the oil price... I think it's logical that you will get certain investors that look to pick the bottom in certain sectors.”
Mining analyst Peter Strachan told reporters that he believed Kerry Stokes was looking long-term, with prediction that gas will rise again in coming years.
“It's likely the price of natural gas will rise and probably triple over the next two to three years,” Strachan said.
“Companies like Beach Energy or Drillsearch, which have gas-producing assets in the Cooper Basin, will be in a very strong position to benefit.”
Seven Group Holdings' also owns a $100 million stake in gas giant Woodside Petroleum.
“We believe Beach Energy is well managed and has strong assets that are well-placed for increasing future energy demand,” a company statement said.
“Seven Group Holdings’ investment in Beach Energy is consistent with its strategy of participating in high quality energy opportunities that will add shareholder value.”