RE: RE: Strong 2011 and very strong Q4 financials Based on Q4 which earned
.03 per share or
.12 annualized, SKO should earn close to
.30 per share by doubling production to 1600 bpd.
The extra earnings power per barrel will be due to the higher percentage of brent ( 68 % ) per barrel and also to the fact that new production increases SKO's ownership earn-in rates.
That is, doubling production should result in a fair value near $2 per share at just 7 times net earnings .
In addition, increased production from new portions of the oil reservoirs and to new reservvoirs will add more 2P barrels to the oil reserves which will also enhance valuation levels.
Production guidance should be forthcoming soon.................I still believe that a merger or acquisition of SKO by PMI is possible this year