* Producer as of Jan 2019
* Breakeven this year is $29 brent (on the CC they say long term will be $19)
* Oil sells at $1-2 premium on brent
* Bauna production at 20k a day // this was at 28k in 2018. reason for this is 3 pump failures - this is not the natural decline. (per cone call) *** expect karoon to increase production not decrease.
** Macs research has production at 20k a day and increasing to 30k when Patola comes online. (conf call says production will be > 40k barrels at the start)
** Cash flow - $270m in 2020 // asset paid off by 2022
** RBC -> Bauna at current oil prices has generated $600m usd of value for shareholders **
** oil hedging of Bauna will happen when the asset completes (perhaps 50% of production) ** we need oil higher into 2020 **
So what does all this mean?
Well, $3 price targets from RBC/MACQ are factoring dilution at 1.40 - (which would be impactful).. at $2.50? price targets move significantly higher
It also doesn't account for any Neon/Peru activity.
So where do we price a company which will be 4th largest oil producer on the asx .. $250m of debt and rev of $500m usd - thats the million dollar question.
Well if RBC says at current oil prices - extracted value is $600m usd = that is $3.50 of share price. then if we add in Neon & Peru - perhaps we are closer to $5. The major delta is the oil price - if that goes up by $20 then that will add 30% to our free cash flow numbers. I don't see any risk to the deal not closing.
We are also getting a free carry on this purchase - we are accumulating oil $ based on jan 2019 and we don't have to pay any interest. infant the longer this is drawn out the better - we will have to raise less.
I believe this is now part of a much bigger story and funds will want to add this in to their portfolios. Im not sure when the share price stops - but most oil cos are trading 2-3x revenue(and we will have far less debt). We have good growth options - we don't need excessively more debt to increase our reserves. Its very exciting. Im confident we head to $3 fairly quickly based on relative valuations.
buckle up.
PB
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$2.16 |
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Mkt cap ! $1.730B |
Open | High | Low | Value | Volume |
$2.19 | $2.19 | $2.14 | $10.36M | 4.784M |
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No. | Vol. | Price($) |
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5 | 63354 | $2.15 |
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Price($) | Vol. | No. |
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No. | Vol. | Price($) |
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11 | 173611 | 2.140 |
6 | 157023 | 2.130 |
2 | 11403 | 2.120 |
2 | 9616 | 2.110 |
Price($) | Vol. | No. |
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2.160 | 78637 | 2 |
2.170 | 108213 | 6 |
2.180 | 153607 | 8 |
2.190 | 261096 | 14 |
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Last trade - 16.10pm 28/03/2024 (20 minute delay) ? |
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