RE: RE: pretty good #'s Fear not Molman. Its cash flow or net operating income that we should focus on. Bankers took a $65 million depreciation and depletion expense in 2012 verses just $40 million in 2011. They also booked a $6 million loss on a commodity contract (hedging paper loss I believe). Just these two non cash items alone account for $31 million additional expense over last year. They may have booked a higher D&D expense due to the reserves reduction.
Net operating was up by 30% over previous year which is fabulous which resulted from three items....higher production, higher commodity price and improve realized price.
The company will likely generate ~$280 million of operating income this year which is $1.10 per share if Brent stays above analysts estimates.
Bankers should be trading at about 4 times this years cash flow which would be a share price of $4.40, but because of the major confidence issues last year the market refuses to give them a decent cash flow multiple but rather a multiple one would assign to a low production junior in a higher risk geography like what it is currently trading at.....2.80 times 2013 cash flow and ~35% of its 2P NAV.
Other than out performing quarterly production estimates the only other real catalysts are a gas strike in Block F, Improved decline rates, perhaps a $400 LOC approved and success of the polymer and waterfloods extraction enhancement pilots.
Once they get to annual production of 20,000 bbls per day I believe they may get a take out bid, but sometimes I just wish they would get one now for $5.50 - $6.00.