Here is a thought...... - Say base production in 2013 is 12500 bbls per day (it may likely be more but very unlikely less)
- Say Stella comes on production in late July at 30000 boes per day sustained (it may likely be more but very likely less) and 16000 net to Ithaca
- So then the average production for 2014 will be ~19200 boepd
- Say Brent comes off to average $100 in 2014
- The netback would be ~$65
- The 2014 cash flow per share will be $1.41
- So at a CFPS multiple of 2.5 we have a share price of $3.53
- And at a CFPS multiple of 3.0 we have a share price of $4.25
This to me is the low case scenario. Also remember that as the company heads toward the end of the year, the market (and analysts) will be looking at a full year production of ~25000boepd (11,500 base plus 13500 Stella). So at the same crude price the CFPS is 1.84.
And at the same multiples we have a share price of $4.60 and $5.52 respectivley in early 2015. Worth the wait is it not?