the defintiive valuation, page-6

No worries Paprika, I see we have a few stocks in common. CTP and BRU are the current heavy weights in my portfolio. BRU is aiming to produce 5,000 bopd from their Ungani wells in 2014. That seems pretty optimistic seeing it's only a year away and we haven't even secure another rig yet, as we'll likely need to do a horizontal and work over the 2 current verticals to get to that flow rate. Assuming things turn out as planned we should be making some $60 mil a year from this alone - thats a PE of less than 10 at current sp from one prospect alone !The cash we have should last us this year but I'm pretty sure there'll be another cr before we have cash flow from production as we have a lot of areas to derisk.

Cr's are good if it is to speed up the derisking process. What the market hates is stagnation. Not in anyway implying that current slowing down of activities is management's fault at all. In fact after reading through the latest announcements again I think they are very prudent in in their planning. Get it right the first time and minimise future stuff ups. Getting a bigger rig will in the long run save money as deeper prospects can be drilled at the same time, and safety issues and stuff ups can be minimised. We don't want any more incidents like the Century rig incidents at the Ungani North, also with CTP, and now with NSE. With no rigs to drill NSE got absolutely belted recently. I see no rigs to drill as the main reason for the current drop in BRU's sp as well. That will all resolve itself in due course, hopefully sooner rather than later. In the mean time I'm sure there are a lot of planning going on behind the scenes.

I like what ES stated in the recent Company Insights interview. Mitsubishi and Buru both have their priorities aligned. They both see the oil project as their highest priority and want to progress it "as fast as practicable". No more gas well is to be drilled until we can fracc and flow test the existing ones. I also like the fact that ES does not want to farm out the gas project as yet until we can extract more value by derisking it further. We have wells already drilled so fraccing it to prove up and add value won't be costing too much but will add enormous value in future farm outs.

We still have Ungani North that is yet to be flow tested. Given that management's focus is on the oil, if we can prove up a few more Ungani look alike in the near future we can have enough income to not worry about anymore cr in the future. The profits generated will more than justify the current market so there won't be any downside risk with the Unconventional projects. That's got to be foolproof! Don't forget that we have well over 20 Ungani look alike prospects to drill. Not to mention our recent purchase of Rey's tenements that could potentially double the Ungani trend area. And the Laurel also runs into those tenements. And the Goldwyer as well !

But, forget about all the unconventional projects. The Yulleroo BCGA, the Yulleroo conventional sands that could potentially flow 20 mmcfpd, the Valhalla BCGA that could hold tens of tcf of recoverable gas, the billions of barrels of unconventional oil potential in the Goldwyer. Why? Because the market gave $0.00 value to it! Zits ! Nothing! Naught! Nil! The Ungani prospect alone (not the trend) when developed in 2014 will more than justify the current market cap. If the trend itself turns up as good as we hope it is, then that's a ten bagger there. Why worry about anything else hey ?!