I'm honestly torn. Assuming Cervantes is a duster, that ratio doesn't give much capital for drilling and therefore growth is limited. However the divi stream based on current shareprice would give a fantastic return. It's then a case if looking at the company as an annuity rather than an oil and gas explorer/producer.
That's assuming an equity based expansion plan. Bringing debt into the equation increases the risk (Ken, I'm looking at your history) but could be a real have your cake and eat it too moment. An additional producing field (Kinta) or a successful oil drill (however small) changes the equation.
I like that they've stated their plan and appreciate it's hard to give more detail prior to stabilised oroduction. I'd expect them to make out something a bit more sophisticated at that point - reconciling projected cash flow against expected use of capital. Only then could we truly assess the merit if the plan.
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