AMU 0.00% 21.0¢ amadeus energy limited

for arthur and b2

  1. 396 Posts.
    Arthur and b2

    While I am happy with AMU as a company and its prospects, I am certainly not happy with its current share price.

    But I invest in a company based on its fundamental strength, and for those who have read my previous posts on AMU, I have set out my reasoning on why I consider their production and profit performance for this financial year will be outstanding. And one which warrants taking a position in the company. Nothing I have seen since then contradicts my assessment that AMU is on track to report a net operating profit of A$4 million at least this year. Taken together with their conservative asset backing (worth a conservative 25 cents a share without taking into account the newly acquired producing asset of Morgans Bluff and their Red Creek asset) AMU meets my test of a good buy.

    As for why the market appears to place so little value on AMU I cannot guess. Maybe in the current environment investors are just leery of micro-cap companies that aren't paying dividends (distribution of Virtual Control Systems shares aside). Maybe the potential for the options to dilute shareholdings is a worry for some (although 27 million 03's and 28 million 04's shouldn't do that, especially since their excercising would bring in $5.4 and $7 million in funds). Who knows?

    Regardless of the reasons, I view the current levels as a chance to accumulate a hugely undervalued oiler before the market wakes up to 1. the rivers of cash that are flowing from its expanded production, and 2. the likely increase to this river that will result from even modest successes from their 8 to 9 wells to be drilled before end June 2003.

    And the announcement they made last Friday just reinforces my view - more on this tomorrow.

    Good luck to all those who sail on the good ship Amadeus.
 
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