Ann: June 2022 Quarterly Activities and Cash Flow Report, page-89

This wasn't a great report largely because they've now missed successive production forecasts. Clearly production was lower than expected and the negative surprises this year have outweighed the positive surprises, which is unfortunate.

Track record often dictates whether you trade at a premium or a discount. Right now, it's certainly the latter, but I don't think things are as bad as many here would suggest and it shouldn't take much to win back confidence.

Overall, there was a production miss but financials were in line, driven by higher realised prices. I think the negative reaction has been way over the top.

I can certainly understand the rationale from some of you that have sold. Personally, thank you for your constructive and honest views. Wishing you the best of luck on your next investment but I hope you can still post even as non holders.

On the flipside, I'm still holding and see a very strong 2023. Per the call today, the H2 numbers are "conservative." Reverse engineering, the $A oil assumption, I get WTI of around US$90, which I think is easily achievable (with some upside).

At today's close our EV is $80.6m - that's basically 1x their adjusted EBITDA for FY2022 (i.e. before hedges). We have a very significant tax shield, we're now net cash and hedges roll off from Jan - these are material tailwinds.

I also get similar numbers to management with fairly conservative forecasts i.e. free cashflow after capex of $45-50m in 2023. That's a VERY large cash build up for such a lowly valued company. I think the market is mispricing this.

Sure, there might be other plays with lower decline rates or lower maintenance capital requirements but they are also valued materially higher.

Broadly, in 2023 the FCF yield will be around 54%, which is staggering. That provides a lot of firepower for buybacks, dividends, growth etc. In effect the forecast high cash backing provides a buffer against potential oil cyclicality. All this excludes Montney too, which would double the SP overnight.

The discount here is staggering and that remains the opportunity. As always, it's about a risk adjusted return. With all the negative comments (some justified), it's worth remembering that it's priced in the SP and then some. You'd think we're going to be bankrupt by the sentiment here and yet we're in the best position we've ever been in and the outlook is bright. GLTAH.