GASX (symbol GASX.V) | food for thought... ...based on recent statements of Dr. Jim Jones:
- The analysts of Beacon Securities recently modelled GASX producing 61 million cubic feet (mmcf) a day in 2022.
- CEO Serafino Iacono currently said that the company would net US$150k/day per delivered 30 mmcf/day, simply leading to US$300k/day in case of potential 2022 60 mmcf daily production, modelled by Beacon Securities.
- US$300k x 360days leading to US$108 million annual cash flow...
- Putting a conservative factor of 5x on that cash flow (assuming a P/E Ratio of ~5) >> it would lead to a US$540 Million / CAD675 million GASX market capitalization (mcap).
- This mcap means a potential upside for next 12-18 months of factor 5x - based on current GASX mcap levels...
- It is important to know that GASX already being fully funded to drill now 4 high impact wells at their Sinu 9 gas bloc - where 20 years ago a well has been drilled already (Purpose at that time was looking for oil) - and produced 10 mmcf natural gas a day.
- Only GASX´s Maria Conchita near term production with current proven & probable (2P) net present value (NPV10) of US$120+ million equals a surplus of CAD$1.16 per curent share - only that's already a great downside hedge!
- The CEO recently said that GASX will not raise additional capital (by eventually issuing new shares) until the 4 wells at Sinu-9 bloc have been drilled and tested. (And for sure not at the recent low share price level)
- The still growing Colombian natural gas market is net short of natural gas with a remarkable deficit and it is currently paying US$12 - US$15 per thousand cubic feet (mcf) to import it from the US.
- Resources of historical gas fields in the country being already in terminal decline. Canacol (the largest Colombian natural gas producer) is already trying hard to replace its reserves…
- GASX´s Maria Conchita expects to be on production by 2021 year end...
- Imagine that GASX´s Sinu 9 bloc has the potential to bring in greater natural gas resources than Canacol´s overall booked reserves...
A nice evening everybody!
Gotti