Ann: Quarterly Activity and Cashflow Report, page-23

Looking at the last 4 quarters and summing, we can see that:
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Last 4 quarters Revenue =1,130,000+ 628,000 + 254,000 + 394,000 = 2,406,000 revenue for the year

Last 4 quarters production cost = 147,000-224,000 -101,000 -219,000 = -397,000 production cost for year

For last financial year‘Years Production cost’ / Years revenue costs = -397,000/2,406,000= -16.5%

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i.e. production costs have been approximately 16.5% of the revenue cost for financial year 2024/2023

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The non-variable overheads are what SHE needs to escape to get into higher orbit.

These fixed overheads are obtained from adding up the most recent 4 quartiles outgoings such as :

Staff cost for year =-72,000-53,000-71,000-46,000= -242,000

Admin + corporate costs= -229,000 -128,000 -193,000 -122,000= -672,000

Staff cost + Admin + corporate cost = $-914,000

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So for 2024/2023 financial year the fixed costs took a sizable slice of the Revenue at -914,000/2406,000=-38%

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But for the financial year 2024/2025 the revenue has already ramped from this time last year,

Assuming the last quarter revenue continues throughout 2024/2025 then revenue may be around 4.5 million (4*1.13 million)

If we assume production cost remain the same percentage of 16.5% ,then 16.5% of 4.5 million revenue would be production cost of .75 million, take off the Fixed overheads of around 914,000 again and you have next years Gross profit

Take of tax and you have net profit, from my calculations this should increase the cash position around 30% (assuming of course they do no further investments)

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This is assuming:

*Oil,Gas,NGL commodity prices are the same

*Fixed cost is the same.

*No new projects are started, this might be the case as gas price is very low
*Ignored positive cash flows from interest and dividends.

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Since share price currently and unfortunately is only following cash value then we should see an increase in share price.

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I expect SHE will do some investments though to move productions assets forward thus lowing the cash reserves but again increase future revenue streams .

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We don’t have to be to patient on this one to see fundamental growth but will have to be patient to see this reflected in the share price … although slow it is low risk and the return/risk ration is good in my humble opinion.