share buy back announced, page-20

If they buy shares above 55c I agree with you it is strange, but it is now 44c. Give me 55c and I will hand you back 44c any time you want - 18.14m times to be precise (the max size of the buy-back)


The reality is US$ oil is down 35% compared to the A$ down 20% so earnings will be hurt. That said, the hedging provides significant protection (which is why banks insist on it). Further, if you look at the average price for FY08 oil was US$93.63, gas was US$9.08 and A$ was $0.8972. So having regard to hedging, in A$ we are still ahead or in line with FY08 when the company had underlying eps of 15c.

Oil and gas production should hopefully be higher in FY09 compared to FY08 given recent exploration success so the comapany should hopefully make more than 15c. Therefore, at today's prices, PE is 3x and proven reserves are 12 plus years, not to mention the 2P and 3P reserves plus exploration potential.

Wyllie and the directors did not punt real money on this at 55c for fun. I still say if the share price does not recover to a reasonable level there will be a takeout, but it could be a long wait.

If you think oil is going down and staying down, why would you hold shares in a small oil company?

Just my opinion
Monty