Another factor underpinning AMU's market cap of around A$110M is probably the hefty oil reserves it holds. Last estimate was just over 13 million barrels of 1P and 2P reserves. Despite a bit of production draw-down since then, I would imagine AMU's spate of drilling success has easily covered that, plus added a significant amount more.
My rough guess is that its reserves would now be sitting around 15 million barrels. At a conservative valuation of say US$11 a barrel (1P reserves were being sold at US$10 a barrel when oil was US$27.00) their reserves would be worth around US$165 million (A$214 @ a $0.77 exchange rate).
With no debt, AMU's net asset backing (A$1.39) from its oil reserves alone is way in excess of its current share price. This would provide considerable comfort to institutional investors I would imagine. Add a bit for gas and a bit more for the biodiesel business and, on an asset backing basis, AMU looks good value.
(I hold and am in for the long haul. Roll on Iberville Parish).
AMU Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
