RE: How Long From the recent NR, we know the following.
Cap ex for 2012, $62 million.
Cash from operations in 2012 $37 million
Bank line (based on 1800 boe/day), $45 million
So at the end of 2012, they should have bank debt of about 25 million, or 55% drawn bank line.
At the end of 2012 they expect to have about 3000 boe - which suggests a bank line increase to $75 million.
ie going into 2013, they'll have about 50 million in available bank line, and about 50 million in internal cash flow from 2013 (assuming there is no growth in 2013.
If they get the same growth rate in 2013 - (and it could easily be higher if oil increases). Then they'll average production in 2013 witl be 4000 boe, with an exit rate of 5000 boe.
That would mean average internally generated cash flow in 2013 of $61 million at current net backs. If you increase the price of oil by 10-20%, then internally generated cash flow could eaily be 70+ million.
ie 50 in unused bank line and 70 ish million internal cash flow - or about $120million access in 2013.
Its a mugs game to try and look out more than 2 years - so I won't go further. What we can clearly see however, is their new strategy will not put them anywhere near their credit limit in the next two years, while at the same time allowing for lots of growth.
On a cash flow per share basis, 3000 boe at the end of 2012 means $1 share annualized cash flow at current net backs. And about $1.7 at the end of 2013 with the same growth rate and same net backs (likely growth will slow and net backs will increase, giving a similar result).
Choose your own cash flow multiple - ie is 4, or 8 or 12 etc.....................you can do the math from here.
The bigger question is will VRO be allowed to stay independant until the end of 2013, or will someone else take them out before we see all that value.