how much downside here?

- People hate it, shareholders have been burnt on this big time over the past few years so it is very much out of favour
- Oil price of $1.12 vs $78.50 in last year financials as average (33% price rise)
- Sound Balance Sheet. Cash positive.
- New CEO leading to better strategy ? completely withdrawing from Africa, much more geographically focussed in Asia, Australasia
- Strong underlying business and oil fields. Got rid of BMG disaster and have taken the full hit on the Balance Sheet.
- Think the AUD is still overpriced. All their assets in USD will make them more valuable against the AUD share price when correction eventually takes place back to 75c.

Last year financial statements were based on sales at $78.50 average oil price. This year to date Brent Crude oil price has averaged $104 and is trending much higher (all it would take is an eruption in Saudi Arabia and this share price would sky rocket). 33% price rise within 2 months and trend higher ? tell me a retailing company that can match that. My money is on oil price hitting some big numbers this year.

Some other things that are relevant I think:
- BMG bleeding and pain should have all been taken on Balance Sheet.
- Pretty aggressive capex target this year ? another potential upside rocket to share price. If exploration is successful this could become anything. It not much discovered still well and truly going to cover the existing share price. Capex is an area that is critical that they get runs on the board and improve as track record has been poor leading to shareholder bleeding.
- More than 5 years full production of oil in their oil field reserves. At current oil price of $112 per barrel less $17 production cost per barrel equals to $1.305b or $1.83 per share (vs 36c share price).

Risk is very relative to share price and at this price a gamble I am very willing to take. It is a bet on the Brent Crude oil price staying above $100 this year and the company not wasting capex. Other risk is that they do not have any operational disasters which shuts down production to any material extent. If oil price gets back down to below $90 in a hurry I would probably get back out.

DYOR
Good luck