impressive future - hugely undervalued , page-4

Hi Cincinnati Red

Like you, I continue to be amazed at the markets response to AMU. Probably I am too close to the stock and blinded by what I see as it undervalued nature.

I can understand that from the perspective of differing views on where their production is heading. After all, I am only 'best guessing' when estimating its future oil and gas production - and accept others will reach different conclusions based on their assumptions.

But I find it harder to doubt the underlying asset value that AMU commands. Their reserve base would have to be in excess of 13mmboe given the terrific drilling success they have had this last year. That has both proved up suspected reserves and brought them into the producing/proven category and made some great wildcat discoveries indicative of new reserves.

I don't consider it is unreasonable to attribute 1 & 2P reserves of 15mmboe to AMU. Nor, in the current oil and gas market where futures prices are in excess of US$55 a barrel out to Nov 2010, do I think an average of US$15 a boe is unreasonable. Put the two together and AMU is sitting on reserves with a value of aroudn US$225 million or A$300 million. It strikes me that provides a lot of appeal to go long in AMU.

Comments welcome ...