Im getting very worried about my holding in this coy. I see it hitting the 50's very soon. My reasons for this is,
1. I expect SXY to be very shy on their next oil numbers for the year, they won't keep the 430k barrels up each qtr so I'm guessing around 1.5mmbo, I would expect them to beat that but I'll say that that's what will be roughly predicted. That's not a great increase from last yr so the share price won't increase.
2. Far too many shares out there in the market, this is a fact and is hurting any rise in price, I'm guessing a consolidation is on the cards at the corporate briefing, this rarely delivers a price rise in the short term.
3. I can't see why people think this is a takeover opp. Not for at least 2-3 yrs, why would anybody bother until they know that the gas is a realistic option and commercial. If I think of he usual suspects, BPT, Reg is about to retire so they won't be doing any acqs in near term. DLS, too small, too much debt already. Santos, I've heard they aren't allowed any acqs til first boat has left. Origin, they are already in there with JV. BG, rumor is they are more likely sellers not buyers.
4. We don't ever hear about the Surat Basin CSG, this makes me think that something is happening here that they will hit us with at the preso, I think it will be capital intensive but then I keep remembering how many times ID has said that they are fully funded for all project, we can only wait but I just get a feeling something is up.
5. Without any gas blue sky SXY is going nowhere, even then it will still take 2yrs and cash but what's the alternative, the oil won't hold the share price up without so major discoveries.
6. SXY doesn't have the infrastructure to put on much more oil production and the fields aren't massive, they will have to divide time between production wells and exploration wells.
Just my thoughts, I have bought some more recently so I can lower my entry point but I'm not sure this is such a winner that everybody thinks it is. I hope that the ID preso is a game changer and clearly outlines his vision. It's far to say that the oil business won't change the share price without some major exploration success but then that will hinder the production amounts and that is what the share price is being valued on. It's a rocky and slippery road!
Good luck to us all. Appreciate any thoughts back.
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