PSA 5.77% 5.5¢ petsec energy limited

is a dollar possible?

  1. 1,317 Posts.
    For those PSA holders who are wondering how long this run might last think about this.

    When you look at comparable oilers like AYO, AWE or ARQ only ARQ in my opinion offers the same upside potential as PSA.
    People say the problem with PSA is its low level of reserves but I would go so far as to say that 10bcf of reserves in the GOM could be worth as much as 100 bcf in say the Bass Starit where AWE has to invest huge sums of money in production facilities, pipelines treatment plants etc and then sell the gas at low Australian prices. In the Gulf of Mexico, PSA or any other producer for that matter, only has to put in a production platform on a discovery, link it up to a nearby pipeline, and these criss cross the GOM like a spider web, and sell the product to a distributor at premium US prices. Bob's your uncle. No need to do any marketing as Amity has to do, nor help customers with connections. In other words, for PSA no fuss, no bother and no delay in developing a handsome revenue stream. Remember West Cameron went from discovery to production in about four months. Also remember that Vermilion already contains an 8bcf reservoir discovered in the late 80's. At today's prices lets value that at US$4 a bcf or US$3.50 net. Thats a net US$28 million. Even if you allow US$3 million for a well and platform and you are still left with a net US$25 million or A$40 million. These are the sorts of small scale but richly rewarding projects that PSA specialises in. Three of four of these at Vermilion and you are looking at $120 million from these leases alone.
    In short I have no difficulty in believing that PSA will be at a dollar or more before the end of the year and maybe even sooner.
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