618You are one of the few people on Hotcopper who actually does...

618

You are one of the few people on Hotcopper who actually does some analysis. Well done. Have you compared STX to AMU. I do think STX has good potential, but AMU is proven already and is cheaper on the metrics you list. You do need to take into account the drilling costs for STX to prove up your estimated 35-52 BCF on a 2P basis. Also take into account AMU's reserves are 1P - this will become clearer when they next update their reserves (see recent ASX announcements). The simple point is STX's drilling should prove up your reserve estimate, whereas AMU already has the reserves already and additional drilling should add to their reserves. Also, oil is significantly more profitable than gas if you use the standard energy conversion factor of 6:1. Oil is effectively trading much higher than gas, and this in my view is because gas in the US is much more exposed to a sluggish domestic economy, whereas oil has global exposure.

I would steer clear of PSA - high costs, poor exploration track record, high acquisition price etc etc.

Look forward to your thoughts.

Just my opinion
Monty