RE:RE:Legendary BERati has disappeared BERationale wrote: You missed me Hanna! I didn't think it was necessary to post negatives on this board given there are enough bashers. But now that you ask... I have done some real DD post release and here are the two main takeways:
1) The negative proved reserves values are very concerning - find another E&P company that has negative PDP reserves much less negative 1P on some of their properties (especially with the commodity prices they used) and I will buy you a pint. NPV's are the holy grail for E&P valuations and if they can't push out the lives of these fields, reduce the abandonment costs AND capture the tax pools, they will never be able to get any cash out of the company so it doesn't matter how much they have.
2) They have only disclosed the working capital values - not the actual cash and more importantly not net of debt. I fear there are going to be some negative surprises in the Q1 results in terms of guarantees with the gov't and long term debt with Trafigura (so net cash will undoubtedly be less).
I will continue to monitor and could start buying agian but the next six months will be sideways IMO.
GLTA and I sincerly hope I'm wrong.. Now don't bash me for being real!
1) Jadestone Energy, thanks for the pint. Imho you can't compare offshore oil Npvs/reserves to onshore reserves 1:1. It's not unusual, that offshore don't have reserves xx years out.
Of course the abandon costs are tax deductable too.
2) They disclosed the actual cash: Us$ 243m in the acquired entity + the cash/or - liability in the core Valeura company. This added Us$ 105 m net working capital....to the Valeura working capital (be it positive or negative).