am i a goose or a gander, page-6

This was when at 35cents so will bounce. just hope the company boughts some in the buyback today?

Stock Research: Salinas Energy (SAE)
Independent California oil producer
Operator
Using horizontal drilling
40,000 acre land position
30 staff: 7 in Australia, 23 in US (operational base)

Recent share price: 35 cents
Shares out: 241m
Market cap: $84m
Net cash: $7m (no debt)
Company currently buying back shares
Year end: 30th June
$55m accumulated losses

Current production/forecasts


30,000 bbls
US$3m revenue
1,350 bopd
Still on target for 287,000 bbls for calendar 2008
At current oil prices (US$140/bbl), 2008 calendar year sales expected to exceed US$25m.


1,100 barrels per day production
US$20m revenues forecast for 2008 (based on US$85 less US$13 heavy oil discount oil price)
287,000 barrels production forecast for 2008
Targeting 2,000 bbls/day production by end 2008
- @US$80/bbl (net) = US$50 - US$60m annualised revenue
- @US$100/bbl (net) = US$65 - US$70m annualised revenue

BJ forecasts

Calendar 2008
287k bbls * US$90/bbl = US$26m revenue
Operating profit = ~$US$15 (60% margin, no tax)
Less development and exploration costs

Calendar 2009
US$60m revenue
Operating profit US$30m
Less development and exploration costs

Comments/Summary

* Low risk production, with some upside.
* P/E on calendar 2009 operating profit -> 3.
* Potential for P/E for current operations to be re-rated.


* Paris Valley should be low-risk upside
* Plus exploration targets Merlot and Osso Bucco
* SAE estimates risked value of these 3 at $1 per share

Significant share price re-rating probably depends on exploration success, as increased NSA production coupled with the increased oil price is not moving the share price.

SALINAS BASIN

1. North San Ardo (NSA) field

15m barrels in place
5.5m barrels 2P recoverable reserves
Phase 1 (2 years): Primary production
Phase 2 (10 years +): Secondary production steam enhanced
Peak production in early part of each phase.
11/11 well success
2,000 bpd facilities in place
Operating costs US$11/bbl
Royalties 22%

Drilling 8 wells in 2008

2. McCool field

5m bbls in place
Heavy oil
Potential 1m bbls recoverable
Extended well testing in Q2/3 2008

3. Paris Valley (SAE 50%)

100m+ bbls in place
Targeting 25m bbls recoverable
Heavy oil

Drill late 2008

EXPLORATION

Southern San Joaquin focus
Light oil
Targeting 50% equity

2008 Prospects
a) Paloma field and Osso Bucco prospect
Recoverable potential -> Mean 11m bbls, Upside 28m bbls

b) Merlot
Recoverable potential -> Mean 18m bbls, Upside 46m bbls


* Anticipates drilling Osso Bucco and Merlot wells later in the year.
July 28, 2008 6:02 PM

Must be some US investor who needed cash today ?