what went wrong?, page-6

The following is from Comsec late last year and pretty much sums up the general market perception of Roc. I hold but am wondering if there are better fish in the sea... that said, it is still probably good longer term value

Roc Oil Company (ROC)
Why has ROC been so badly trashed?
On 28 October 2008, ROC filed its September quarter report.
Operations
�� Reported production was 915kboe or 9,952boe/day. Production wasboosted by the inclusion of ROC’s share of the BMG field which was acquired through the acquisition of Anzon Australia (AZA) from 8 September 2008.
�� ROC drilled two exploration wells in Angola and both were dry.
�� The oil price averaged $118/bbl during September and has averaged $113/bbl year to date. At the time of writing, the current oil price was $62/bbl.
�� Despite the high oil prices, ROC’s net debt has been reduced by only US$ 8m over the course of the year.

Investment review
�� ROC’s share price has collapsed, from over $4.00 in July 2006 just after the acquisition of Zhao Dong.
�� ROC closed at 46c yesterday, having under-performed all relevant comparatives over the last two years and especially the last month.
�� Since initiation of coverage, CommSec has maintained that ROC’s aggressive exploration programme has destroyed shareholder value.
— ROC has since stated that it will be looking to do more of its exploration drilling by attracting farm-ins.
�� CommSec maintains that ROC’s acquisition of AZA has destroyed shareholder value. This is due to the capital involved, which is estimated at being up to $A 1,230m for field development plus US$ 400m for a larger FPSO, this estimate factors in CommSec’s assumption of $65/bbl as the Long Run oil price.