PSA 0.00% 11.0¢ petsec energy limited

strong outlook for this gas producer

  1. 1,317 Posts.
    Amazing where Graham gets his ideas from but refreshing I suppose that we do have some PSA doubters even though the stock is up 500% in 12 months!!!

    I don't expect to hear from PSA how important the recent Vermilion acquisitions are until the MMS confirms their bids after doing a "public good " analysis. This can take up to six weeks so hopefully we will get an explanation at the AGM in May.

    Looks to me like the Vermilion play is going to be very profitable and will involve more prospects on the newly acquired leases. Otherwise why spend A$18 million drilling the two wells and building a production platform.

    Although delays in China drilling are diappointing it does allow more cash to build up in the bank at a time when production at West Cameron is probably down now to 12-13 mmcf a day net.

    I don't know that for sure as the company won't give out figures until its quarterly activities report due at the end of April. But I would have expected natural decline to have impacted on production rates in this March quarter. The June quarter will be even less productive as they will be doing some recompletions over the next couple of months.

    But the second half should be a real bonanza with Vermilion in production as well as the next sands at West Cameron. Gas prices should stay up this year as they did last year given weakness in supply situation and continuing strong demand.

    PSA had better than 20 cents eps in 2003, look for that to be better than 30 cents in 2004. I don't know when the analyst community is going to wake up to these figures but when it does there will be another rerating. The ASX will certainly move PSA Graham, but not in the direction you are expecting.
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