There are very few near certainties in the stock market so when...

There are very few near certainties in the stock market so when they come along they have to be recognised and taken advantage of.

One near certainty is that Petsec is going to be producing between 15 and 25 mmcf from its two new Vermilion wells "by mid year".

Lets say Vermilion comes in at 20 mmcf a dayand West Cameron plugs along at 10 mmcf a day. With nat gas averaging around $5.80 net for the rest of the year PSA is looking at free cash flows of something like A$45 million in the second half. And that's as near a certainty as one gets in this business.

And those figures are conservative with many analysts saying we could see nat gas much higher than $6.00 as we go through the northern summer and head for the next winter. And remember too that the Vermilion platform will have the capacity to produce up to 45mmcf a day so if any of those lower sands are water pressured initial flow rates could be much better than 20 mmcf.

And then there are the five wells to be drilled on Vermilion in the second half.

Another near certainty is that PSA will undoubtedly reveal more about its new Vermilion leases at the upcoming AGM which will no doubt have a few indusry analysts in attendance this year. The Chairman's speech will go out as a press release reinforcing a fact that many investors seem to have forgotten and that is that PSA made $22 million profit last year and will undoubtedly do substantailly better in 2004.

Don't let the China disappointments blind you to the potential of this one. The tide is about to turn again IMHO