Interra Resources

Interra Resources: strong 2Q13 results that likely surprised the market. Net profit surged almost 9-fold to US$4.5m from US$0.5m a year ago, while revenue nearly doubled to US$13.8m from US$7.1m, driven by a doubling of the group’s sales of shareable pdtn, which increased to 190k bbl in 2Q13 from 85k bbl in 2Q12, despite lower transacted oil prices at US$98.54/bbl (from US$107.01/bbl yoy). Growth was boosted mainly by Indonesia, as sales surged 3.5 times yoy to US$9.1m, while Myanmar sales expanded at 4% to US$4.7m. The group plans to drill another 4 wells in Indonesia, and 24 wells in Myanmar in 2H13. backed by cash of US$10.4m (no debt), mgt believes it has sufficient cash to meet its operating costs for the near future. The group will continue to actively seek new concessions and assets to strengthen its presence in the region as well as to achieve growth sustainability. At the $0.46 last close, the stock trades at 9.1x annualized 2Q13 P/E, 2.1x P/B.