ris it ***overvalued now ~ !*** ??? OK, first of all, check out the thread from about six months ago, with me arguing with Graham.
Current big numbers for ITC ; 167k admin costs a quarter, $1.78m cash and 187m shares.
Right now, with ITC shares trading for five-and-a-half cents, that makes ITC worth about $9-10m. Take out the cash pile, and it's $7-8m.
Assets-wise, they might have a free carried 10% of a nickel mine, but I know nothing about hard rock, so I wont comment.
They have 15% of 2 oil discoveries, Mirage and Ventura. Neither discovrey is that great, but cash flow is cash flow.
Median figures for Ventura is about 200k barrels, and for Mirage is 1.3 million - 1.5mmbl have an NPV of about $30m at current prices, so thats $4.5m worth of oil for ITC, to go with the $1.8m worth of cash.
More important is the cash flow - remember, ITC needs $750k a year to pay for admin, the office, keeping the directors in the state to which they have become accustomed etc. Call it two grand a day.
Based on the flow rates so far, Mirage is sustaining 270 bopd. I'd be guessing that Ventura will be on the low end of their estimate as well, so thats a total of 400 bopd.
At a net A$30/barrel, thats a total of twelve grand a day, split between the Coalition.
ITC's cut is 15%, so thats call it two grand a day.
OK, admin is covered, and they've finished their buy-in, and are now paying even money.
The question then is "Can ITC turn their cash pile into decent wells ?".
Paying in at 15% stretches their $1.8m to about five wells ... they might have some value in their nickel assets, but basically, they need to hit something to retain their value.
Cooper and Stuart are still better value, in short.
Ian Whitchurch
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