However, the broker says that at $1.50 per share, Novus has hit its target price and has reduced its rating from "buy" to "hold".
Novus announced this week that it had signed a "Principles of GSA" agreement for the delivery of natural gas from the Brantas PSC to Perusahaan Gas Negara, the national gas distributor in Indonesia.
Under the agreement, the Brantas PSC will undertake to supply up to 80 million cubic feet per day on a reasonable endeavour basis until the end of 2007. Current production from the Wunut field has averaged 45mmscfd, although production has intermittently been as high as 55mmscfd during periods of high demand.
Deutsche Bank said because of the new agreement, Wunut field delivery will be expanded through the drilling of additional development wells and some expansion of existing facilities. The additional cost of the development is expected to be less than US$4 million to Novus.
"The recent share price performance of Novus has been stellar," Deutsche Bank analyst John Hirjee wrote in a recent investment note.
"The Australian energy sector has had a renaissance with the oil price view becoming stronger for longer. We recognised Novus had investment merit given its deep discount to value and its status as the cheapest in the sector.
"The value has been captured with the share price reaching our target price. So we are cutting our rating form a "buy" to a "hold"".
Novus was trading at $1.45 at time of posting.
