I hold PSA and would tend to agree with you but it is interesting to note the reduction in WC from16 BCF to 9 BCF by the company.
this section was from the report
The valuation represented in this research report is based on PSA’s 2P reserves estimates ratherthan independently assessed reserves. Prospective investors should note that PSA’s internallygenerated 2P reserves are approximately 80% higher than determined independently by Ryder Scott according to rigid SEC guidelines. The author has made this choice on the basis that theCompany is significantly closer to the technical information than the independent party and makesits business decisions onthe basis of its internally generated numbers. It is worth noting that bothparties substantially downgraded West Cameron reserves in 2003.
I assumed that the -7.2 reduction made by Petsec is all WC but maybe some of it is Vermilion. Note the report also mentions that they have produced 7 BCF gas from WC so far so if I'm right that entire reduction is from WC then production from WC will last a few more qtrs at best.
More worrying is how right are the rest of their estimates if this one is so wrong? I took the veiw that they learnt from this excercise and hence their current predictions for other assets now includes the learnings from this misjudgement. In otherwords in the future we only see upward revisions not down ward.
PSA Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
