re: chart suggests pennant break. Subject stuart fundamentals redux. again Posted 04/11/03 20:08 - 57 reads Posted by ian_whitchurch Post #170931 - in reply to msg. #157433 - splitview
At 60 cents a share, Stuart Petroleum is more undervalued now as it was in July 2003, when I originally bought in at 28 cents (check the records on the Aussie Oilers board in Yahoogroups).
Back then, Stuart had 60 million shares, a 28 cent price, four PELs and 1.2 mmbl in Acracia. The market valued them at $17 million ie A$14 NPV for the oil, with the PELs worth nuthin.
Right now, Stuart has 60 million shares, a 60 cent price, 4 PELs, 1.2 mmbl in Acracia, 2.4 mmbl in Worrior and a probable couple of BCF of gas in Kiwi. The market values them at $36 million ie A$10 for the oil, with the PELs and gas worth nuthin.
Cash flow wise, Worrior is coming on line within weeks, and that will mean Stuart is producing 2000 bopd at a net margin of A$18 - and they have hedged their oil production at about A$42/bbl.
As to the values of PELs, note that companies volunteer to do approximately $2m worth of seismic and drilling to get a 25% share in one of the Cooper Basin PELs.
Worrior coming in at 3.4+ mmbl recoverable - or double the pre-drill estimates - should also increase the value of the PELs, because it shows Cooper Basin wells have upside risk.
As far as the news cycle goes, we have the farmin deal for Panning block (280 bcf probable reserves), the production announcement for Worrior and the pipeline plan for Worrior (which should add $2/bbl to STU's bottom line).
Stuff the chart. Buy with your ears pinned back.
Voluntary Disclosure: Position Sentiment: Buy
STU Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
