bargains to be had, page-8

You must really be on cloud nine!

You posted:

"margins still at $5.50 per mcf

costs $1-2 mcf"


I listened to the presentation and I think that you had better go back and listen again.

At about minute six of the presentation the presenter said that the cash flow figures on the chart were based on the operating margin of $5.50 per mcf were BASED ON LAST YEAR'S FIGURES.

Second the costs for F & D were anywhere from $1.75 to $2.

That is F & D........NOT COSTS!

I suggest you also take another listen at the 15 minute mark and quote the amount of funds needed to implement the drill program talked about in the presentation.

Next, use the amount of cash on hand, a REALISTIC price for NG, a REASONABLE amount of ACTUAL production, then tell us all how much that is and IF PSA will be able to fund it all from its resulting NET cashflow.......

You also have to ASSUME that there is NO storm disruption to any of PSA activities in the next two months.

That is a doubled edged sword: no disruption will see NG prices fall into the $4 per mcf area. A disruption will cause higher prices, but could cut PSA production IF its facilities or those it relies on are hit and IF great enough again find the company having to think about its hedges.

Now not to add to you misery you have to think about:

1. PSA prices its product in US$ which is falling again.

2. NG storage in the USA is probably going to hit a record in the next couple of months

3. The cash price of NG is probably going to hit the $4 level once the storm season is over and those storage levels begin to hit records.

4. PSA's new production, if not storm damaged, will come on line just as the NG storage hits those records.

5. The share market is quite volatile and the last couple of weeks show what an happen to share prices if the market gets hit again.......

6. Moonshine IMO will give PSA another hangover...can (will???) they go it alone if the current partner pulls out?