September 20, 2006

Deutsche Bank initiates coverage of AED Oil Ltd

Deutsche Bank has initiated coverage of small cap stock AED Oil Ltd (ASX: AED), with a Buy recommendation.

Research analyst, John Hirjee initiated coverage with an A$5.00 price target.
Mr Hirjee said “In our view, AED is one of the more promising junior explorers, which could make the transition to producer.

“AED is on the cusp of maiden cashflow and profit from the development of the Puffin field which is scheduled for first oil in the first half of 2007”, he noted.

Recent drilling and survey information saw AED’s estimate of oil within Puffin North East rise from 13mmbbl to in excess of 90mmbbl.

As the market keeps increasing oil forecasts to match the macro realities, the search for an long term equilibrium price continues. Debate surrounds the traditional long-term price scenario built around US$20-22/bbl WTI which is currently seen as too conservative by equity markets but still used by companies in their investment decision process.

Mr Hirjee’s price target takes into account both Deutsche Bank’s current long term oil price of US$45/bbl WTI (West Texas Intermediate - a US benchmark for light, sweet crude oil), and the much more bullish prices implied by the crude oil futures forward curve (as at June 21 2006) with the ability to sell forward in 2008 at US$69.50/bbl WTI.

AED Oil Limited is a Melbourne based exploration and production company established in 2004 focused upon acquiring, developing, and commercialising oil fields and exploring petroleum opportunities primarily within Australian territorial waters. The Puffin field is located approximately 80 kilometres west of commercially developed Jabiru and Challis oil fields.

Equity rating recommendations are based on expected total return (including dividends):
Buy: 10% or more over a 12-month period
Hold: between -10% and 10% over a 12-month period
Sell: -10% or worse over a 12-month period

For further information, please call:

Cathy Knezevic
+61 2 8258 2792


Kate Abrahams
+61 2 8258 2416

Deutsche Bank

Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With Euro 1,058 billion in assets and 65,435 employees in 73 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.