While the WTI price is $90/bbl, ELK would be receiving about $75/bbl for it's production (average of SDS and Grieve probably $15 differential to WTI).
With ELK producing 220bopd net, that gives revenue of $16,500 / day. Average costs may be $30/bbl so margin is $45. Gross profit would be $9,900 / day or $AU4M p.a. based on current exchange rates. That equates to 6.5 cps and on a PE of 10 and that justifies a $0.65 sp.
In other words, the current sp doesn't take into account the Grieve development.
Plenty of blue sky here!
ELK Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
