Newsletter   -   March 2007

In conjunction with RP, Sentinel Financial Group are please to present this monthly newsletter on the Australian oil and gas industry...

Re-Badging of Resource Personnel

We are in the midst of a corporate identity change from Resource Personnel to RP. This will take into account the planned growth of the consultancy and training segment within the company. The official launch of RP will take place sometime in late March/early April but in the mean time you will notice gradual changes in the web site and other communication media (see the new logo above!). The new "RP" encompasses the recruitment side of the business which will still be known as "Resource Personnel" while the consultancy and training arm will be known as "RP Integrated". The current web site address and all current staff e-mail addresses will still function as normal after the change.

RP Integrated - The Value Proposition

Apart from providing focused in-house training for various clients, RP Integrated provides a range of integrated consultancy services from audits and peer reviews to field development studies. Unlike the normal upstream consultancy practice, we prefer to work with our consultants on a project basis i.e. we do not have consultants working on a permanent basis in our offices. This working arrangement suits the skilled professional who prefers not to get involved in the day to day issues of a normal business and who can thus be purely focused on delivering value to the client on a project basis. It keeps our overheads down resulting in more return to the consultant and the company. Managing such teams requires good systems and processes to ensure the right focus and sufficient degree of integration between the different discipline professionals. We achieve this by taking time at the start of each project to develop a roadmap. This involves framing the objectives, work scope and methodology and agreeing intermediate milestones and the final deliverable.

If you are an experienced subsurface professional seeking a new challenge in your career, RP Integrated want to talk to you!

General Market Review

February's stock market activity can best be described as a story of two halves:

For the majority of the month, the positive interim profit reporting season helped propel the S&P/ASX 200 ahead strongly, breaking through the 6000 mark for the first time. Resources companies including BHP-Billiton, Rio Tinto, Oxiana and Woodside were major beneficiaries from the commodities boom, all reporting strong results. BHP in particular impressed with the announcement of a US$10bn addition to its existing capital management program. Industrial winners included CSL, Computershare, QBE Insurance and Telstra.

Then, on the last day of the month, the index effectively reversed the entire month's gains, as a major sell down in the Chinese stock market and bearish comments from former Fed president Alan Greenspan suggesting the US economy could in fact slide into recession in 2007 combined to send the US market tumbling by over 3% overnight. Our own market suffered its largest single day fall since September 2001, at one point sitting on a daily loss of over 200 points, before staging a modest recovery to finish down 160 points or 2.7% below the previous day's close.

In stock specific news, Coles Group has effectively put up the "for sale" sign after admitting it will not meet its ambitious FY08 profit target. The admission comes after it rebuffed a proposed $15.25/sh offer from buyout group KKR in October 2006. A data room has been established for potential buyers and the "sale" is expected to take place over the coming months.

Commodity prices have generally improved over recent weeks, with copper and zinc recovering from near 12 month lows and nickel continuing its recent strength, surging to fresh highs on continuing market tightness. Oil has also rebounded back above US$60/bbl.

Global Indicies

Source: IRESS. Data as of 28/02/07

Commodities

Source: IRESS. Data as of 28/02/07

Crude Oil Prices - Short and Medium Term Trends

Crude oil prices ended the month with a gain of some 5% strengthened by declines in U.S. gasoline and distillate supplies and fresh concern over possible hurricane activity in the Atlantic later this year.

Energy Focus

Movers and Shakers

A summary of the major Oil & Gas share price movers on the Australian Stock Exchange.

Source: Sentinel Financial Group & IRESS. Last prices and returns as at 27 February 2007.

Who's Making News

A selection of significant recent oil and gas headlines:

Source: Sentinel Financial Group & ASX

Tin Rattlers

Recent ASX Capital Raisings

Source: Sentinel Financial Group & ASX

Float Hopefuls

Source: Sentinel Financial Group & ASX

Recruitment Activity

The demand for qualified experienced personnel has continued to grow since the middle of 2006 with a surge being observed of late. The reasons for this increase in demand would appear to be that pent up momentum has now surfaced at the development and drilling end of the E&P life cycle.

The initial surge of interest brought about by the increase in the price of crude oil during 2004 was followed by an unprecedented and urgent desire for increased activity. For many organisations, it came down to a total re-evaluation of their assets, some of which had been put on hold during the earlier period of low oil prices.

Following this increased activity, severe pressure was placed on the upstream industry causing serious shortages in every conceivable area. Even if drilling could commence immediately there was a severe shortage of materials and equipment resulting in delays. This slowed down project implementation by months and years in many areas. Now in 2007, some three to four years following the initial surge of interest, the log jam has started to move and projects are rapidly reaching an implementation stage. In addition, the relative stability of oil and gas prices give the confidence for many projects to proceed with execution.

If you are a talented professional looking for a change please contact us to discuss prospects (see below for the right contact).

Subsurface Disciplines - (contact: Julie Arslanoski)

Petrophysicists and Production Technologists seem to be "high in demand - short in supply" of late - where are you all? Challenging, rewarding positions are available in SE Asia, Australia and the Middle East, for example:

Petrophysicist permanent position will have horizontal well geosteering experience and be current with the major LWD and wireline providers' equipment and services.

Senior Production Technologist with an independent oil and gas exploration and production company. The operational focus for the group of companies is on the re-development of two producing fields in Turkmenistan.

Well Engineering - (contact: Ray Robertson)

There has been a notable increase in companies seeking experienced Drilling and Completions Engineers throughout the Australasian, Asia Pacific and Middle Eastern Regions, with RP Recruitment experiencing unprecedented requests for suitably experienced personnel.

Looking back on the week...

A selection of significant company news

Source: Sentinel Financial Group & AEGIS. Data covered represents a selection of the market only and should not be considered to be complete. Sentinel Financial Group accepts no responsibility for the accuracy or completeness of these details.

Stock in Focus - BHP Billiton

BHP made headlines in February, reporting a 42% jump in interim earnings to US$6.2bn for the 6 months to December 2006. This staggering result, which is the biggest in Australian corporate history, allowed BHP to undertake a massive expansion to its existing capital management program. Despite having a huge US$17.5bn pipeline of projects currently underway, BHP's powerful cash flow has allowed them to increase their existing buy-back of US$3bn by another US$10bn, as well as substantially increasing their dividend.

Such a watershed result has allowed BHP chief executive Chip Goodyear the perfect opportunity to announce his retirement, and step down from his role as the head of Australia's largest company. After 9 years at the company, and 5 years as CEO, Goodyear has overseen BHP's merger with Billiton, consolidating its position as the world's largest miner. Goodyear has stated that he will retire at the end of 2007, and is confident that he is leaving the firm in a strong position to be able to exploit the continued growth of China and the ongoing commodities boom.

While BHP has generally underperformed the market in the last 9 months, the announcement of this additional capital management program seems to have reminded the market of the amazing cash generating ability of the diversified miners such as BHP and RIO. Since mid January, BHP has moved substantially off its lows under $24 to once again threaten the $30 level in February, before falling victim to market sentiment with a huge fall on the last day of the month.

Source: Sentinel Financial Group, Reuters and IRESS. Sentinel Financial Group accepts no responsibility for the accuracy or completeness of these details.

Coming Up - Key Dates of Interest

ff = fully franked; pf = partly franked; uf = unfranked; TBA = to be announced; TBC = to be confirmed.              Please note, all dates and amounts shown are preliminary and subject to change without notice. Data covered represents a selection of the market only and should not be considered to be complete. Sentinel Financial Group accepts no responsibility for the accuracy or completeness of these details.

Finanicial Product in Review

Tax Management - Agribusiness

'Agribusiness' is the business aspect of agriculture - growing crops for human consumption and use. In recent times agribusiness has grown in popularity, both as an investment class and as a means for managing tax.

Advantages of Agribusiness Projects

Long Term Returns - Agribusiness can provide sound long term, after-tax, rates of investment return.

Tax Effectiveness - For anyone paying a high marginal tax rate, agribusiness products can be an excellent strategy for managing thier tax.

Diversification - As an 'alternative' asset class, agribusiness can provide diversification from traditional assets classes when included in a portfolio of investments.

Recent News

You may have recently heard about the Government's proposed new taxation rulings for managed investment schemes and agribusiness products. This action was sensationalized by the media leaving many investors unsure of the potential implications. However, the Federal Government has clarified that all existing products for 2007 will remain as allowable tax deductions.

Quality Products

Sentinel presents the products of the Great Southern Group of Companies as they have broad experience in this field with over 35,000 people having already invested in previous projects.

Each project is 100% tax deductible and is supported by a Product Ruling from the Australian Taxation Office. Act now to secure your investment, manage your tax and gain the potential for sound returns.

Current Products Available

Great Southern 2007 Beef Cattle Project

Great Southern 2006 Timber Project &

Great Southern 2007 High Value Timber Project

5% DISCOUNT for RP Newsletter Readers

Mention this article and receive a 5% rebate off the cost of your investment! To enquire how these products can help manage your tax effectively, please contact

Jason DiCandilo directly on (08) 9534 6521

About Sentinel Financial Group

Sentinel Financial Group Pty Ltd is a provider of specialist financial services to private and corporate clients. Our focus is on building client wealth through the provision of reliable service, quality advice and personalised investment strategies. Our group is comprised of:

Sentinel Stockbroking - specialists in the provision of advice and execution on all forms of ASX traded equities and derivatives. The company is a participating organisation of the Australian Stock Exchange Group and provides services including:

Sentinel CFD - Sentinel CFD is a dedicated Contracts for Difference (CFD) business offering comprehensive advisory, research and order execution functions. Our primary focus is to provide informed ideas and strategies to enable our clients to effectively utilise CFDs. Clients can choose from the following services:

• CFD trading recommendations
• Online CFD trading platform

Sentinel Partners - providing a wide range of accounting services including:

• Taxation advice and return lodgment
• Personal and business accounts and reporting
• GST and BAS reporting
• Establishment and management of self managed superannuation funds and companies

Remember, when making an enquiry about our services please mention RP and receive a discount on our standard rates.

www.sentinelgroup.com.au

+61 8 9225 0011

Level 20, 44 St Georges Terrace, Perth WA 6000

Disclosures & Disclaimers

All information in this newsletter is provided courtesy of Sentinel Financial Group for the sole use of clients and contacts of RP.

DISCLAIMER

Sentinel Financial Group Pty Ltd (ABN 26 104 456 288) is an Australian Financial Services Licensee holder (ASFL No. 230542) and a Participating Organisation of the Australian Stock Exchange. Sentinel Financial Group's directors, officers, representatives, authorised representatives, members and agents believe the information contained in this document is correct and that any estimates, opinions or recommendations in this document are reasonably held at the time of compilation, but may change without notice.  No guarantee or warranty is given, or representation made, as to accuracy or completeness.  Past investment or trading performance is not a reliable indicator of future performance.  To the extent permitted by law, Sentinel Financial Group disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything in or omitted from this document. Advice included in this document is general advice, based solely on consideration of the investment or trading merits of the securities alone without taking into account the investment objectives, financial situation and particular needs (i.e. financial circumstances) of any particular person.  You should not act on any recommendation issued by Sentinel Financial Group without first consulting your investment advisor in order to ascertain whether the recommendation (if any) is appropriate having regard to your investment objectives, financial situation and particular needs.

DISCLOSURE

Sentinel Financial Group Pty Ltd (ABN 26 104 456 288), its directors, officers, representatives, authorised representatives, members and agents declare that they deal in financial products as part of their business and consequently they may have a relevant interest in the financial products recommended. Sentinel Financial Group receives brokerage or other benefits from dealing in financial products and its authorised representatives, or introducers of business, may directly share in the brokerage or benefits.  Sentinel Financial Group, its authorised representatives and their respective associates may have positions in the financial products mentioned, which may change.

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