RE: OK Enough Already with the CowtowingWho gives a hoot about break even? It's totally meaningless now as the shares more than discounted that fact LONG ago. Spent capital is just that - spent. At $3 sh, there was risk to the downside. At $0.65, there is none.
What matters is relative valuation. With 7500+ net production and $21 bbl cash costs, IAE is trading at ~1x cf, well below the peer group at 3x.. It trades at a fraction of 2P after tax NPV10 ($2.25/sh) while peer group trades close to full NPV. It trades at about $20K per flowing bbl, which is half the peer group. Jacky will generate over $200MM, more than twice what it cost to develop.
Yes, Jacky reserves are smallish, but everyone who paid a bit of attention knew that going in. The plan was always to use Jacky as a method of self funding other projects and to help monetize otherwise marginally economic reserves at Beatrice/Polly.
At current oil prices, both Stella and Carna can be self funded and generate enough spare cash to fund a few exploration wells. Net production is set to climb up over 10,000 boed without resorting to any outside financing or equity - all from Jacky cash flow.
As for Jacky, withconsistently better production on both pump and natural flow thanexpectations, there is very likely to be upside reserve revisions. The second well at Jacky will also increase reserves. And now that Bravo is online, they can rework existing wells and record additional reserves. Polly also has reserves that can be tied into Beatrice. All those follow on additional reserve additions flow from the development of Jacky, so merely looking at current Jacky reserves is a mistake.
The risk to IAE isn't to the downside for those who are paying attention. Octagon and Fraser Mackenzie don't have far higher target prices for nothing...