re: not going to go into debt again
Coming from a finance and accounting background I see very little that is ineffecient about the PSA balance sheet apart from a lack of leverage. In fact compared to most of its junior peers it is far more robust.
On the subject of dividends I stongly doubt that PSA will move in this direction any time soon. Its generally not a characteristic of a junior and as a personal investment philosophy I would rather they reinvested in exploration to increase the company value than pay a dividend stream.
The value of Petsec is most effected by the reserves it books and right now with the slow speed of the onshore Louisiana wells and the delay at Main Pass we are a net consumer of reserves. This could turn around relatively quickly especially if, as JC considers, there is more at Louisiana than a typical Petsec target and Beibu Gulf gets the green light.
When Petsec has booked reserves in excess of 100BCFe then it would be fair enough to think they might consider paying a dividend. At this level of reserves commercial debt might also feature.
PSA Price at posting:
0.0¢ Sentiment: None Disclosure: Held
