Very disappointed with today's announcement. I nearly reduce my holding. I still hold because of the followings.
1, current Realised Oil Price should be USD$42/b, minus operating cost $10/b, minus leasing fee $9/b, net profit should be still $usd 23/b. Given oil price stable at current level for the rest of this year,production at 400b/day, yearly profit should be around AUD$5 million. NET PROFIT should be 2 million, which equal to1 cent earning /share. If oil-price can going up to $60/b, we should expect 2 cents earning/share.
2, If above is true, SP should get some supports at 10c/ share level.
3, Most importantly, I strongly believe SAE will sell its Paris Valley interest soon.
1} "third party to acquire a selection of Salinas¡¯ assets" if you were the third party, which asset would you buy at current oil price level?---Paris Valley project only!
2}, SAE already stoped its plan on Paris Valley, even after it gets approval to drill. "new venture program" also means SAE will give up Paris Valley Project .
3] SAE mentioned 3 times saying increasing share holder's value this year, but this is the first time to say" sell asset" . In my eyes the only asset selling that can increase SV is still the Paris Valley asset.
4] If Paris valley interest sold to third party, I roughly reckon the deal should be around USD $8-12 million.
Finally, " Major capital expenditures at NSA now complete" plus "Remedial well work in April is expected to increase production at NSA" give me some basis to expect 1 cent earning / share. Any asset selling is also helpful to realize current NTA/share at 16 cents.
SAE Price at posting:
9.0¢ Sentiment: Hold Disclosure: Held
