What is wrong with brent crude at US$65 ? That equates to A$92 at 70c Aussie. Cost at $30 gives Drillsearch net of $62 per barrel of oil. Even if their oil production falls to 2mmboe per year, on oil alone DLS will earn $124m per year.
A lot of capex last year was on unconventional shale gas. That's gone this year.
This FY16, Drillseach will make EBITDAX of around $150m.
And likely to be sustainable for a number of years.
The mindset in Drillseach should focus on profitability. Not on trying to be a very big company.
DLS Price at posting:
54.5¢ Sentiment: Sell Disclosure: Held
