is stu's hedging a dampener?, page-5

re: stu's value? Morning B2, tis a glorious day in sunny Melbourne!
On a simplified per barrel basis-3.2mmbls at between A$18-20 a barrel gives a range of A$57.6 to $64million, add cash on hand around $5m, divided by 60.5m shares gives a range of $1.03 to $1.14. Add to this the exploration dirt-70 prospects of which 25 are oil with in place estimates of 79mmbls-coupled with a 65% strike rate.
On this basis call it all up north of $2.00 per share.
If you prefer PEs, my model suggests earnings per share of A$ 0.36 after tax for the year ending 30th June 2005, ie the current share price is just over 3 times projected earnings. I would have thought 6-7 times a more satisfactory level allowing for the price outlook and the decline curves of the fields.
On a DCF basis, it obviously depends very much on your oil price assumption. Mine, in summary, uses A$ 45 barrel over the field life post 30 th June next year(compared to the present price of A$75-they get slightly better than WTI being a Tapis producer), a discount rate of 10 % , decline curve of 20% per annum, and so on.
On this basis it is still north of $1.50 pre Arwon.
Cheers,TAS