price triggers

Next positive price triggers:

1. Upgrade in Production rates (circa 2000BOPD): Mid Dec 2009
2. Announcement of Drill targets (3D seismic): Jan/Feb 2010
3. Potential Reserve upgrades (3D seismic): Jan/Feb 2010


Reserves are small... but likely much larger. Difficult to estimate. 3D will shed more light. Analysts will not rerate ITC till reserves are upgraded. There are alot of dodgy players running small oil caps around the place, over promising and under delivering.. I don't blame them.. Most funds won't touch stocks under $50mil, ITC is hovering just under this level. Once the three above things occur.. I can see a huge rerating of this stock. It will be a multiplier effect, double or triple hit. I hold a significant amount and wont be selling. I am doing my bit to create some institutional interest on this stock.

Currently..

Snatcher Field: 1.5mil barrels. Based solely on 400yard drainage circles. Will most likely increase after 3D (expected Jan 2010). I believe ITC reckon more likley 2-4 million barrels. Don't expect Snatcher production until mid Dec. Snatcher-3 expected to come on in Feb/Mar. Snatcher 4 may be next target.. will be essentially the Liberator lead.

Growler Field: 1.8mil barrels, 400,000 pumped already. 1,000BOPD, minimal water cut and minimal decline.. suggests a larger field than currently thought. Could optimise out at 1200-1300BOPD.. need to see what JK does with choke sizes etc. He may yield.

Tigercat expected to come onto production Feb/Mar 2010. Further drilling here could reveal another Growler!

ITC have enough cash to drill 6-8 more wells in the 1H 2010, basically, one a month. Each drill is about $2mil, ITCs share ~ $800,000. ITC would like to drill for 8-9, we'll see what JK (VPE) wants to do. If they drilled 8-9, they would have under $1million cash left though. Presuming no increases in production/POO etc... but thats 8-9 drills, and at current success rates!! (success rate 2009 =100%!!!)

There is huge upside with an awesome success rate with the drill bit. Even if they drill 6 wells in the first 6 months of next year.. and they have 3 successful wells, imagine 3 more Growlers or Snathcers.. You can see how by end of 2010/early 2011, they could have gross 4000-5000BOPD or 1600-2000BOPD next to ITC. Current margin is A$50 per barrel.. At 2000BOPD over 330 days, thats A$33million in net sales!!!

ITC needs more broker coverage. I know at least Euroz are looking at them. But bigger houses in the East will need to be supporters before we see sustained higher levels. Things are happening, and I suspect in 3 months this will have changed.

Yes.. they are undervalued. I hold. (Would buy more if I had more cash). Auto.. well worth your while.

A.