The big question for PSA on China is await the eventual increase in reserves(through step out and old field drilling) and first production etc.This has its issues in that it ties them a s a very junior partner to the whims of CNOOC,pipeline tarifs etc.Alternatively sell the asset and deploy that cash in areas where you have control.I would sell and the value you get will prob be around 40-60m depending on the buyer. by that i mean a new buyer may pay more for strategic reasons.
i also do not believe that PSA future lies in shale gas but shale oil and deeper oil/gas plays esp in the salt dome areas.i am less confident on NG prices due to the huge amount of shale gas in US. The latest NG figures from USA show they had the highest consumption since 2008 in Feb but prices remained in that $4 band. Unless there is a big governmental push for NG cars it will be a slow rise on the back of increased industrial production rather than the old spikes of recent years.
Psa, for all the derision on this forum, has very good contacts in the US.this is the key to acreage.Mike harvey and his exploration manger are now very much part of PSA.It is a different beast from 2 yrs ago. this has been lost due to the debt issues.It is however slowly seeping through to the market. the other thing misunderstood,and this is psa's fault, is how good the marathon discovery was and how it has opened up new drilling opps.
this co, as i have said before, has dodged a bullet and come out the other side. it is not still dodging. things will continue to improve for Psa
PSA Price at posting:
23.5¢ Sentiment: Buy Disclosure: Held
