undervalued????, page-5

Jojo,

Nice work, and I didnt see any holes in it.

I'd personally be conservative and use a net A$25 for Cooper, rather than net A$35 ... but a US$42 oil price and a 70 cent A$ turns into A$60 a barrel, which minus A$25 production and royalties, is your A$35 number.

Figuring mining companies on PEs is a bit trickier, as they only get those earnings while they have the reserves.

Valuing Cooper Basin oil at A$18 in the ground, if we take Cooper's 1.2 million barrels of reserves number in their 17 September update, we get $22m worth of oil. Add their $10m cash and we get $32m of value.

That justifies about 30cps, valueing the exploration acreage at zero.

If you agree with the 3-year oil prices staying above US$40, then you can probably use a higher number than A$18 for oil in the ground. Take it up to $22 and thats $26m worth of reserves, plus cash takes it up at $36m of value, or about 33cps.

Arwon is likely to be 3mmbl recoverable, and they have 11.2% ... thats 0.3mmbl. If it comes in, and it should becasue it's on the path the oil had to come through to get to Worrior, then thats another five cps or so.

More interesting is how Cooper are using their csah flow to establish positions outside the Cooper, such as the deal in offshore Morocco.

The Cooper Basin is going to be Cooper Energy's cradle, but they arent going to stay there.

Ian Whitchurch