new hartleys report, page-14

Hi all, don't usually post on these sights as see the flack that people get so normally just sit on the sidelines and read the informed posts, but anyways, thought it about time I gave a little back. NB all the following is IMHO and if you disagree then that's all fine, that's what makes a market but here's a dose of how I see it;

Reality Check, PCL is a spec O & G explorer, chance of failure is much higher than COS ... Ie it is a big gamble, if you're not happy to take a big gamble with you're money then its simply not the stock for you, I am happy to gamble and am loaded up to the tune of 500,000 shares (which I'm currently down 60% on), would love to buy more but I am not prepared to lose more than that so I won't, I've learnt the hard way not to over invest more than you're prepared to lose in 1 share.

Capital Raising; I think talk of a CR is 'premature', PCL's cashflow's appear well managed, which is one of the main reasons I invested in the first place, cash after Sunbird will be approx. $14M .... management would be mad to CR at 2c which is my feel of where we'll go if Sunbird is a dry hole (which is more than likely as that's the game we play) as they just need to sit back and carefully manage their cash for the next 2 years which $14M is ample to get them thru and then they'll have a free carried drill in Namibia and all going according to plan a free carried drill on-shore Kenya, that's another 2 chances of striking something at no cost which would then allow them to CR on much better terms, as such why CR at 2c .... the only reason I can see for them to CR at that price is if they do stick another hole off-shore Kenya this year, which I think is unlikely if Sunbird is a duster and if it's not then CR won't be at 2c.

Assets; Everyone seems to think PCL has no assets, they have assets;
1. They have a lot of ground in Kenya, this has value, maybe not a lot but it has value, everyone seems to forget that they found 50+ meters of gas at Mbawa ... yes not commercial by itself but it proves a working petroleum system so there will definitely be more out there ... has anyone ever seen a gas field found without others around it? The question is will there be enough to be commercial, until that is a definitive 'No' then Kenya permits have value.
2. Namibia.... this has a lot of value, Tullow (whom I believe to be the best operator in Africa) are spending $130M to earn 65%, simple mathematics then puts an implied value on 30% of $60M ($130M/.65*.3)
3. Cash $14M after Sunbird

As such on sunbird dry hole I value PCL as $60M + $14M + a little for remaining Kenya.... so without doing the calc I think that's around 5c per share.

On sunbird success, all Kenya offshare will be re-rated and it's all up to Mr market then.

My take on Tullow and Apache withdrawal from L8, Apache; I wouldn't have a clue, don't know much about them, why they're now stating they haven't withdrawn, 'why not?', they've more than likely seen a loop hole which allows them to stay in for now ... they'll probably ratify their withdrawal if Sunbird is a duster, gives them a free option incase its a success. Tullow withdrawal, well that is a disappointment, that says to me that they don't see enough there for them to stay involved and as previously stated IMHO they are the best operator in Africa. However this also needs to be taken in context, Tullow have in their development pipeline numerous large oil finds in various countries, spend money on a permit that may or may not have commercial gas and is very unlikely to hold oil, nope they have better things to spend their cash on....like Namibia :)

Cheers all, all IMHO