I am new to oil company investing.Can someone explain how the...

I am new to oil company investing.Can someone explain how the hedging programme will affect profits for 2005.
The qutr report forecasts 540000+ barrels for 2005 and STU have hedged 45000 barrels per month at A40.31.
Does this effectively put a price cap of A40.31 on the sales up to 45000brls/mth."

Yes.

"If this is the case,the stock to me looks fairly priced around 70/75 cents on 2005 forecast production of 540000 barrels."

I dont see that, given that thats $22m worth of revenue, with direct production costs being around $12m for that quantity of oil, and the company being only valued at circa $45m.

In addition, that counts nothing for the value of exploration acreage and new discoveries (and Arwon and Doremius are both quite high-probability, although Doremius is gas rather than oil).

Ian Whitchurch