quarterly, media and drilling reports, page-7

For what it's worth Trudy, some of us have been very positive on this stock for well over 2 years (personally, have held it since 10.5 cents and still holding 60% of my original purchase).

As such, we have not been pumping it and then forgetting it. Make up your own mind - the information is all pretty straight forward and little guesswork for this one. When it was 20 cents I thought it was a $1 stock. Come June 07 financials if this is not over $2 I will be very surprised.

Quarterly report makes the following clear:

3 mths revenue: US$9.1 mill (discounting catch-ups)
3 mths expense: US$3.7 mill (including exploration)

3 mth Cash flow: US$5.4 mill
Annualised: US$21.6 mill

Debt is US$74 mill (refer AMU hedging announcement). Assume interest rate of 10% (higher than according to hedge announcement) we have income of US$14.2 million - approx $18.5 million Aussie dollars.

For a company capitalised at around $200 million, with $40 million of the market cap from ARW, the numbers at in no way demanding. Then consider the following:

* by 2007 ARW will have been selling diesel from plants for a full year and showing strong profit - share price likely above current levels (or at worst solidly supported)
* the above expenses exploration, assuming no success. Worst case over the past couple of years will see 60% success
* reasonable portion of oil and gas is hedged, so almost no downside risk to the numbers

MJS