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PSA 15.5¢

loose valuation of petsec

  1. Jim

    798 Posts.

    Had a hack at valueing petsec - without growth prospects:

    (1) the gas price is the major variable;5 is too high to base the numbers on ,it will spend a few months over 5 this year (currently 5.80)and a few months around 3 .the average henry hub price for 2000 was 4.32 ,2001 4.05,2002 3.37.i feel 4 is a reasonable number for this year.

    (2) kindly the company has provided costs of .5

    (3) Annual net cash flw is us $4.00 - 0.50 x (18 +1.5) at exchange rate 0.6 =A$ 41.5 for the year

    (4) at 31 december 2001 annual report the company had a$121 tax losses expiring 2005-2019, so no tax payable

    (5) using a discount rate of 20% (lets face it, who doesnt have a required rate of return of at least 20% on a spec stock?!), and using three years of production figures to compensate for probable field decline, NPV is $87 m or 83cps. dropping the discount rate to ten percent (as brokers do) is $103m or 98cps

    and then theres the other prospects and then theres china.......

    good luck!

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