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16.5¢ sundance energy australia limited

Re Rating Time ??, page-26

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tilleydog

1,160 Posts.

18/09/14

18:46

Post #: 13996347
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Originally posted by OilGoldGas ↑

Current acreage according to Jon Bishop from Euroz should be held by production within about 15 months at current CAPEX levels.....this allows them to start acquiring new acreage very soon without placing too nasty a Capital problem for them...depending on the HBP dates on any new acerage...

So far these guys have shown brilliant management, so there is no need to assume they would start buying acreage that had silly HBP capex requirements on it... Sure if they are going to CR to buy acreage, then they may as well grab a chunk of cash for acceleration of drilling, or just a balance sheet buffer.

Since 2008 these guys have proven time and time again to be able to grow value for shareholder with and without CR's so anyone buying the business and its model, and what they chose to do, and what happens in the very short term is largely noise ...If they CR next week and the SP jumps around for 4 weeks so be it, who cares, the fundamental brilliance of the company, its assetts and its management wont have changed...so for traders focusing on any CR timing is critical, but for investors and CR is pretty irrelevant as you might miss the next price jump sitting it out in fear of a CR....

The other thing is for anyone timing this, you better seriously consider what the next Quarterly is likely to be as a price catalyst...I cant predict if the SP will go up or down on the quarterly release, because we dont know the content ....But one needs to consider this....
1. How will the market react if they come out well ahead the 2014 exit rate already and 3 months early
2. What effect will this have on price when they now have 4 quarters of significant production and revenue growth
3. What effect will it have when analysts are forced to upgrade price targets because they have exceeded the exit rate by 25% (ie a full quarter) ??
4. What effect will it have if they have another several wells on zipper fracs that show rapid paybacks over months rather then years..and higher EUR's

Personally i think the next quarterly should be a huge price catalyst to the upside and i cant see how a CR between now and it would be wise especially given the current price pullback and especially if managment knows the next quarterly is going to be a boomer...id be more inclined to think they will spit out a fantastic quarterly, the SP might shoot up another 20 to 40c on the back of brokers and analysts using it to up targets and get clients buying and then a CR would be a smart move if they are ready to do so....so the dilution of 5-6c or so wouldnt really bother anyone..

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ogg
great summary
one thing for sure about SEA management is that they keep things pretty close to their chests and always seem to over deliver
no reason to doubt that they wont do it again when the next quarterly comes out
I too don't think they will do a CR in the near future when they only have to wait 6 weeks and hopefully if needed do a CR when imo the sp is higher

SEA Price at posting: $1.27 Sentiment: Buy Disclosure: Held
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0 Great analysis

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