This was when at 35cents so will bounce. just hope the company boughts some in the buyback today?
Stock Research: Salinas Energy (SAE) Independent California oil producer Operator Using horizontal drilling 40,000 acre land position 30 staff: 7 in Australia, 23 in US (operational base)
Recent share price: 35 cents Shares out: 241m Market cap: $84m Net cash: $7m (no debt) Company currently buying back shares Year end: 30th June $55m accumulated losses
Current production/forecasts
30,000 bbls US$3m revenue 1,350 bopd Still on target for 287,000 bbls for calendar 2008 At current oil prices (US$140/bbl), 2008 calendar year sales expected to exceed US$25m.
1,100 barrels per day production US$20m revenues forecast for 2008 (based on US$85 less US$13 heavy oil discount oil price) 287,000 barrels production forecast for 2008 Targeting 2,000 bbls/day production by end 2008 - @US$80/bbl (net) = US$50 - US$60m annualised revenue - @US$100/bbl (net) = US$65 - US$70m annualised revenue
BJ forecasts
Calendar 2008 287k bbls * US$90/bbl = US$26m revenue Operating profit = ~$US$15 (60% margin, no tax) Less development and exploration costs
Calendar 2009 US$60m revenue Operating profit US$30m Less development and exploration costs
Comments/Summary
* Low risk production, with some upside. * P/E on calendar 2009 operating profit -> 3. * Potential for P/E for current operations to be re-rated.
* Paris Valley should be low-risk upside * Plus exploration targets Merlot and Osso Bucco * SAE estimates risked value of these 3 at $1 per share
Significant share price re-rating probably depends on exploration success, as increased NSA production coupled with the increased oil price is not moving the share price.
SALINAS BASIN
1. North San Ardo (NSA) field
15m barrels in place 5.5m barrels 2P recoverable reserves Phase 1 (2 years): Primary production Phase 2 (10 years +): Secondary production steam enhanced Peak production in early part of each phase. 11/11 well success 2,000 bpd facilities in place Operating costs US$11/bbl Royalties 22%
Drilling 8 wells in 2008
2. McCool field
5m bbls in place Heavy oil Potential 1m bbls recoverable Extended well testing in Q2/3 2008
3. Paris Valley (SAE 50%)
100m+ bbls in place Targeting 25m bbls recoverable Heavy oil
Drill late 2008
EXPLORATION
Southern San Joaquin focus Light oil Targeting 50% equity
2008 Prospects a) Paloma field and Osso Bucco prospect Recoverable potential -> Mean 11m bbls, Upside 28m bbls
b) Merlot Recoverable potential -> Mean 18m bbls, Upside 46m bbls
* Anticipates drilling Osso Bucco and Merlot wells later in the year. July 28, 2008 6:02 PM
Must be some US investor who needed cash today ?
SAE Price at posting:
16.5¢ Sentiment: LT Buy Disclosure: Held