AMU 0.00% 21.0¢ amadeus energy limited

recognition long overdue

  1. 396 Posts.
    Its been a long time between drinks, but the AMU share price is stirring again. Only this time around the latest movement looks substantially different.

    Firstly, it has pushed past previous resistance around 14 cents, and has made a new 52 week high of 16 cents. Secondly, the volume going through is remarkable (for AMU at least). Over 1.5 million yesterday is just amazing for this stock. Although nothing serious yet on the options volume.

    As I have posted before on HC in some depth, AMU is now a regular little cash cow. Its establishment phase is well and truly a thing of the past and its future looks incredibly impressive.

    Why is this so? Lets revisit a few reasons for optimism:
    * it has a stable of long lived wells pumping out a commodity with a ready market and earning a profit that for this last FY should put AMU on a PER of around 4 or 5 (although that appears to be changing every day now);
    * it has an amazing prospect in Red Creek which they have yet to really drive hard, and could easily of itself produce almost as much oil as the rest of their current assets combined and really cheaply at that;
    * the Lago well sounds like it should deliver an absolute motza into their bank and other sands in that well also had gas shows (although these are still to be tested for commerciality);
    * the prospect of step-out wells from Lago could easily repeat the likely Lago bonanza:
    * I conservatively estimate that the oil and gas arm of AMU has a net asset backing per share of over 35 cents (see previous posts for more detail);
    * their local operators are top people who are likely to pick up even more productive and highly profitable ground (and as the AMU coffers swell with all that loot now flowing in, these investment possibilities are expanding);
    * recent changes to the Commonwealth Government's assistance package for biofuels has given a significant boost to the commerciality of ARF; and
    * their bio-diesel project must be awfully close to getting that all important first plant on the ground, and all that will mean in terms of crystallising the commercial appeal of this venture. To jog memories, initial AMU estimates suggested that ARF will deliver the equivalent profitability of 1000 bopd ie more than AMU currently produce!

    With this as background, the only suprise about the current price rise is why has it taken so long to happen and why is it still so low??

    In the near future there should be plenty more good news heading AMU shareholder’s way when AMU announce the flow rate of Lago (and give an idea of the dollars it will deliver) and if the latest Rash Barrett well comes up trumps! That should be soon too as its TD is only 2600 feet, and their announcement today shows its only a couple of hundred feet off that.

    Seems to me that AMU is finally getting the recognition its fundamentals deserve.




 
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