The company makes a net profit at current oil prices but no where near the latest guidance issued.
The guidance was an additional $32.7m operating cash flow for the last half of the calendar year assuming $95WTI and about $20 WCS if I remember correctly. The guidance includes A$18m for capex, and we know they need about A$25-35m annually needed to maintain production. So I am not expecting much growth from this sort of spend level.
The company's operating margin pre capex is expected to be around 45% at the assumed oil price. So if you adjust for current oil price (around 12-15% lower than guidance), you should expect a 25-30% hit to operating margin.
(I don't think hedging has as much an impact here as in the past - it's winding down, and oil prices not too far off hedged prices either)
So that sort of reduction would suggest an run-rate half year operating profit as low as $23m on my numbers, or $46m annualised. This would cover $30m in maintenance capex, but leave a paltry $16m for growth, dividends and building the balance sheet. A far cry from their recent decree of splitting cash flow evenly between capex/SH returns/balance sheet.
I reserve my opinion on whether it's a buy or a sell at these levels, but I do think the market is finally waking up to the reality around some of the numbers, especially pressured by such a huge capex bill required to maintain production on these particular assets. I just wish I knew prior to investing before as I paid the premium for not knowing.
- Forums
- ASX - By Stock
- Ann: Q2/Q3 Drilling and Completion Operations Update
The company makes a net profit at current oil prices but no...
-
- There are more pages in this discussion • 6 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add CE1 (ASX) to my watchlist
|
|||||
Last
0.9¢ |
Change
0.000(0.00%) |
Mkt cap ! $5.571M |
Open | High | Low | Value | Volume |
0.0¢ | 0.0¢ | 0.0¢ | $0 | 0 |
Featured News
CE1 (ASX) Chart |
Day chart unavailable