Jocam there seems to be a line in the sand at the moment in that all the oilers producing big cash flows have been over looked relative to the juniors with nothing but treasure hunting in front of them. The exception being producing oilers that are now close to their exploration season. The likes of ROC and VOY have just got going after a long period of range trading. Arq, another with wheel barrows of cash is also being ignored. PSA is keeping good company!
I suspect however given the volatility associated with Petsec when buyers return the shareprice will rise quickly. Confirmation of the Vermilion wells will spark attention.
Inevitably the market won't ignore the cash flow of $355,000 a day .I hav'nt done the comparisons but that amount of cash flow would probably squeeze PSA into the top ten of all the Aussie oilers. Outside of the big boys like Woodside, by far the majority of oilers would kill to have Petsecs cashflow. Especially given that it has a current time horizon of nearly 4 years, and it has a reserves replacement ratio running around 150% after allowing for increases in production.
If the oil prices continue to rise which I believe they will recession is highly likely as consumers hurt and batten down the hatches. Investors will switch from stocks with high usage of oil/gas products to those producing the oil/gas. Airlines, transport operators auto industry and industries such as tourism will suffer while oil/gas producers and explorers will perform well above the market.
As you say Jocam it may not excite the short term traders but its going to be very good for investors.
PSA Price at posting:
0.0¢ Sentiment: None Disclosure: Held
