RE: Thoughts on POE, CAPEX, cash flow, etc.Zorgon, good quick rule of thumb attempt in trying to put value to POE. I looked at the latest financials (31/12/07) posted by POE and checked their Sedar filing as well. In essence :-
(1) As far as cash flows are concerned, POE says that their Thai operations have sufficient cash to cover all operations. So Capex of $22.2 million spent in 2007 have served them well with enough playing fields to produce more oil. That is positive. No need to raise more equity. There is an outstanding couple hundred thousand shares that can be exercised by brokers who did the recent equity financing. That should bring in about $1 million.
They finished 2007 with cash surplus of $11.85 million of which $7.9 million came from Q4. Last quarter production was net 2400 plus boe/d to POE. Assuming constant production for 2008, we can expect $32 million cash inflow(at current prices).
(2) The asset valuation between Canada and Thailand shows $56 million(Canadian assets0 and $37 million(Thai assets). The latter is producing, the Canadian assets wont be until likely 2001. Any attempt to put a value to POE should in fairness give a value to the Canadian assets.
(3)Q4 2007 EPS shows about 15 cents. Extrapolate for full year will give us 60 cents. This is conservative as it allows for no upside in oil price, no increase in production. Also keep in mind that management's NR says that no appreciable additional costs will be incurred in the Thai operation. In simple terms, it means higher production will give disproportionately higher net income to POE. If we give a probable production increase of 20%, 2008 exit figures could be 12000 boe/d, and a likely EPS of $1 per share. Taking a multiple of 13 will give us $13 per share based on Thailand operation. From there add a value for the canadian assets, and we get a closer picture of POE's share value. An earlier consultant's report had given a NPV on these canadian assets.
Bottom line, POE is a bargain at today's price!