RE:RE:RE:RE:IAE FPF-1 Field Trip - FYIStella pumping in line with flow test results or approaching that level, linked to an oil price of $100 per barrel at a 10 times earnings multiple would generate a share price beyond 10x higher than the current share price.
This of course sounds ludicrous. It does, but that is what the above numbers and earnings ratio would produce - Ithaca always has been on a ludicrous valuation, that is why I kept coming back.
I think that the market is increasingly of the view that very high oil prices are coming, the debate is now increasingly about when. Whether the oil price is $50 or $80 at Stella first oil is not that important so long as the market is confident of an upward oil price direction from the Autumn onwards.
Ithaca's suppressed share price is all about Stella. Previous disappointments and delays have caused many previous investors to lose significantly on Ithaca - myself included, although recent gains have now exceeded my previous losses.
The market needs to believe that Stella is going to happen - nothing more, nothing less. There are 3 steps to this belief being formed:
1. Sailing
2. Arrival and hook up
3. First oil
Each of these steps will move market confidence significantly. I am of the view that once we see first oil, even if the oil price is only at $50, Ithaca's share price will rapidly move to $2.00. From there the share price will move strongly with increases in the price of oil and Ithaca's falling debt.
Doug