Cash break even is about $41.50 ... Replacement of reserves is about $15-$17 on top of that
Accountants version of Break even including full D&A is $76 ... but thats a ridiculous way of doing it
We are ahead of the curve so to speak
Our hedging in particular is going to largely protect us for 18 months... not from share price sentiment, but from any major revenue problems. .. we are 80% hedged so we only take a hit on 20%
The other big plus we have is we are well ahead of the cost curve thanks largely to the recent massive improvements in production which have led to much better margins when the G&A costs get divied up per boe
Dont forget though that this USD rally seems to be an over reaction and if that drops oil should bounce
Nov 27 OPEC meeting will put an end to the rumour mill about the Saudi true intentions...
What the Saudis choose to do in helping Asian refinery margins, doesnt necessarily dictate what US refineries are up to.. sure it plays a big part in the SPOT price speculation, but it doesnt necessarily flow through to 6 month pricing which is whats important to 80% of our revenue.
SEA Price at posting:
$1.10 Sentiment: Buy Disclosure: Held
