RE: am I missing something here ? In plain english, looks cheap like hell!!!
The latest L
potential of 71.8 MMscf/d
with 8.71$ per Million Btu for nat gas (https://www.oilnergy.com/))
converting :
Your gas price is way off. Sales price in Colombia is in the $2.50-2.80/mcf range
1 Million Cubic Feet = 1.02e9 BTU
71.8 x 1.02e9/1e6 x 8.71 = 638,000$ per day !!!!
with 200 day assumed in operation , thats' 128 million per year of almost pure profit since operating costs are a joke !
AOF test rates do NOT equal production rates. They estimate initial production rates around 30 mmcf/d, but will require a longer term production test to confirm this. Don't forget royalties, taxes, and the minor op costs.
Even if you lower it by 4 it's still 1$ per share per year of cash flow!!!!without any other findings built in.
Re-check your numbers with the above gas price and estimated prod. rate.
with 31 million shares, I think this is the steal of the year.
There are 40.8 million shares fully diluted
Even if nat. gas go down 30%, this is going to be a huge cash machine with almost 90%+ operating margins just from that well!
It IS a cash machine IMO, but there's still lots of work to do. It's not going to happen overnight, but in the long term I think PSE shareholders will do just fine as long as there aren't any unwelcome surprises at La Creciente. Lots of upside to be had, but you generally don't want to pay too much for it!
anyone have something to say to my analysis ?
Given the current stage of the La Creciente project, I'd say that the current valuation is "fair". I've been crunching numbers on this for a while and am content to have a little patience right now. It's a great story no doubt, but nothing happens overnight and the stock has had a very impressive run in a short time period... we need something to look forward too!