fair price

OXX followers all retreated and licking our wounds.
Hoped for a much better outcome for the Gawain and Galahad drills. Can't pretend that it hasn't been a major dissapointment for me. While always on the cards I can't pretend that I was not quietly optimistic that these drills my have been the start of something that would transform OXX. We will have to see what washes out.
Wonder what the future of these blocks will be. Oh to be able to turn back the clock and take the 32m USD and walk away. It was never a real option of course. OXX had to be in. Hindsight is a fine thing. Generally speaking it seems tough to turn a trick in the oil business at the moment.
We will have to wait and see what OMV/ENI intend next for these four blocks?
However OXX is not a one trick pony and has a healthy pipeline.

Firstly Shell are to drill in WA-384-P in the 4th QTR.
OXX has a 1% ORR on these blocks. 1% ORR is often equated to a 7-10% interest. OXX free carried of course. In addition there are substantial discovery payments in case of success. 4th Qtr is not very far away. Shell are again no bunnies and would not be drilling unless they thought that there was a prospect worth drilling. In case of success again this 1% ORR transformational for OXX. Will have to see what plans they have for WA-394-P and WA-385-P.

Next we have in the pipe Winchester which is to be drilled by Santos in 2012. No such thing as a 'sure thing' in the oil and gas industry, however one would be justified in being pretty confident. 25% free carried. We would not need too much luck to end up with 25% of say 1.5TCF or 375 BCF of gas close to existing infrastructure. At .50c mcf. This would have an in ground value of 180m odd or 125cps using 151m ords, or around 81cps fully diluted.

Next we have PEP 51906 in New Zealand. The 'nearology' to Tui, Maui and Maari make this permit look pretty good.
Farmed out to OMV retaining 35% free carry for additional seismic ond a drill. OMV need to commit to a drill before Nov 2012.

OXX holds 18.75% of WA-342-P Cornea. Seems to be a complex field that is hard to understand but OXX is sitting on contingent reserves amounting to 18.75% of a 60-80mmbbls oil. What value at this point in time?

Oxx holding 43m shares in CUE which has exciting drilling comming up at Caterina next year and other prospects.

Other permits in the Bonaparte Gulf?
Rats and mice.

Now OXX has among other holdings 43m CUE and 14.5 MOG with a current value of about 14m.
Cash in the bank of about 22m.
Also OXX is to be reimbursed 7m by Santos and 1m NZD? by OMV. Neither of these two payments I believe have been made yet and so are yet to show up in the cash balance.

So OXX's cash and near cash position is about

22+14+1+7= 44m :- 151 = 29cps.

Note also has no major expenditure on the cards in the near future (except possibly Cornea some time out) and 7.5m due on the partly paid OXXCA by the end of the year.

Too cheap. You bet.