PSA 0.00% 4.1¢ petsec energy limited

where to from here?

  1. 3,353 Posts.
    PSA having a little breather today. Until they are ready to enlighten us with some good news, I would think there is not enough impetus to drive it past 65 cents at present. This price is still a little cheap on the pure fundamentals, but it is fair to price in a little discount as the length of the fields is an issue and also they are in a speculative line of business where problems frequently arise.

    So where to? My time line looks as follows:

    1. They come forth in the March 31 qrtly report and give us (hopefully) some very positive news. I think the price at 60 cents or so expects the news to be pretty good. If they disappoint the market, retribution will be swift, but I suspect they will not. If they had bad news to announce, they should really give it straight away.

    2. They give us a sign on the mid year drilling, try and map out for us what the process will be. Jocam raised a point as to whether they will consider a farminee. As a sh'er, I would be quite happy to see them offset the costs and take some risk out of the equation, but I suspect they will not, they seem to be a confident (albeit quiet) outfit.

    3. they drill mid year. An even smallish find (say 10bcf etc) would send us all rushing for the calculators as all the infrastructure is already in place, they simply need to hook it up. This would give the low PE numbers we see 1-2 years more solidity, then the price will really fly.

    4. At end of year, it will be interesting to see a full year of profits through the books, esp deductions against this profit and a fuller assessment of how the tax losses of the company can be utilised and whether or not they have any dividend intentions (fundamentally I always prefer a company with tax losses not to pay dividends, it is not tax effective for its sh'ers).

    Now that we have reached 60 cents, and having taken some profits myself, I am starting to take amore medium term (ie 6-18mth) view and will be trading my parcel accordingly.

    Other views welcome.
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