RE: double digits in no timeMexp3... good post, here are my thoughts:
In Q1 Vero cashflowed $0.60 on production of 5.8K boe/d.... avg AECO price during Q1 was ~$7.45/GJ.
The lastest company guidance for avg FY08 prod is 6.5K boe/d.. Note that AECO gas prices are now just below C$10/GJ... let's assume AECO= C$9.00 (20% higher than Q1) for the rest of the year... and using avg prod of 6.5K/d (12% higher than Q1) for the remainder of 2008.
Vero has 15,000 GJ hedged (~38% of prod) at an avg price in the low $8's/GJ. Factoring in all the above will take H2-08 cashflows to around $0.65 per quarter (annualized $2.60/share), at least by my rough calcs.
Note that Vero has increased its FY08 capex to $65M. Compare this to an expected FY08 cashflow = (33M x $2.60=) $85M... which would leave a cashflow "surplus" of ~$20M for the year, some of which could be used to pay down Vero's $47M net debt (as of 31 Mar 08)
My own shareprice target on VRO several weeks back was $11. With the recent "tuck-in" acq and higher nat gas prices, I now think $13 is reachable (= 5x P/CF , = 6x EV/CF). Today the VRO s/p has hit $10.
On a cautionary note, some time ago I heard one BNN person give a couple reasons that MIGHT hold the VRO s/p back a bit: 1) its association with checkered TUI.UN, and, 2) most of the Vero wells are new and may suffer higher initial declines. Fwiw.
Do your own DD, my calcs may be wrong. Good luck Vero longs.