Dune Energy Inc.(fka DUNRQ)

[OilStockReport]

Dune Energy Inc. is gradually increasing its production. It is also benefiting from cost-control measures. Going
forward, the company is focusing on exploration and development of its projects. We expect these efforts to pay
off well.

Moving ahead, we expect demand to be healthy for liquid gas. In addition, the strong oil prices and strong drilling
activity is acting as the driving forces for the company.

However, we expect slow growth as long as natural gas prices remain low. If natural gas prices climb then we are
sure that the industry will be in expansion mode and so will Dune Energy.

We are also seeing strong growth in international markets which is bound to benefit the company.

Increase in the demand from developing regions, especially China, coupled with stability in the demand across developed nations has given a momentum to the industry but supply constraints remain a major reason of concern.

Factoring the huge gap between the demand and supply conditions along with high loss burden of the company, we would like to remain NEUTRAL on the stock.