Malcolm Shaws take on POE"My thesis on POE is very simple. After blowing its brains out drilling exploration wells in Indonesia (which cost me some money personally), POE has just been chipping away at its onshore oil pools in Thailand. The market cap is circa $38 million and the company has $30 million in positive working capital, meaning the market is valuing its assets at $8 million. What are the assets? A 50.01% interest in a small oil field currently doing 1,800 bopd net to POE with net 2P reserves in the 1.8 million barrel range. The net after-tax NPV5 and NPV10 of those 2P barrels is $49 and $44 million respectively. The net 3P NAV (~3.8 mmbls) has an NPVAT5-10 range of $94 million and $79 million respectively. Remember that these assets are currently valued at $8 million. Also consider that those reserves volumes and values were determined (a) before POE established that it had an active water drive in its L53-DD oil field (which helps recovery factors and thus oil reserves) and (b) before POE renegotiated its sales contracts, significantly decreasing (nearly eliminating) the company’s realized discount to Brent on its oil sales. Add in the water injection that POE says will save $2.4mm/yr in operating costs and I think POE’s NAV is going to go up in early February, after which I think there’s a good chance that POE looks to sell the asset and re-invent itself. POE has consistently sold assets in Thailand at values far in excess of what might be possible in Western Canada and I think that’s important to remember. Even if POE could get to 0.5x NAV, and assuming that I should be thinking more about something closer to their 3P 2019 numbers than their 2P, then I could see a pretty easy 50-75% of upside in POE before I have to think about its valuation again. I realize that’s not that exciting, but I’m okay with that. I think my risk-reward is highly skewed and I’ll see what happens. By February, maybe oil will be cool again. It’s a small position for me, but I like the bet."