multi bagger in the making, page-21

absolut-advance and shareboy.

Rather than myself checking my calculations, I would suggest both of you offer some calculations.

And please set them out as I have done rather than just saying "PE ratio of 2".

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More below from interview and annoucements:

First well producing 0.75M cubic feet of gas per day and 25 barrels of condensate. Quote the presentation of 12/11/07: "31.13% NET REVENUE INTEREST (NRI)". [this well is a dud]

Rocket 2 is second well producing 3.8 million cubic feet of gas per day and 280 barrels of condenstate, which 17.5% NET REVENUE INTEREST (NRI) goes to BUR. [this is a good well]

Jet3 is the third well, with no income stream yet, with 29.25% NET REVENUE INTEREST (NRI). [appears to be a good well]

Therefore: to confirm: From YPU1 well, BUR is earning 31.13% x [($7.11 x 750) + (25 x $90)] = $2,360 revenue per day.

From Rocket 2 well, BUR is earning 17.5% x [($7.11 x 3,800) + (280 x $90)] = $9,138 revenue per day.

In total, we get $11,500 in NRI a day.

Announcement of 12 December 2007 states: No tax payable on gas but tax payable on condensate. What is this tax? Sales tax? Therefore, NET REVENUE is $8,000 a day from the first two wells or $240,000 a month or $2.8 million a year.

(Already this is not meeting expection. Strachan rearch report estimated $800,000 a month from first 2 wells).

Now BUR has a 40% working interest (WI) in YPU1 and a 17.5% WI and 20% paying interest (PI) (??) in Rocket 2, therefore they are paying more than their fair share of explorating and operating expenses.

Jet 3 has 40% PI, 37.5% WI and 29.25% NRI, so again, BUR is paying more than their fair share of expenses.

Therefore, I would disagree in saying $8,000 from two wells is NET PROFIT.

BUR has around 180 million shares on issue, including escrowed shares, 25 cent options and various convertible notes. 110M are shares. 45M are 25 cent options, bring in $11M in cash. Appears to have 1.95M convertable notes at $1 (i can't work these out) and 50 class C shares convertible into 150K ordinary shares. Strachan research report states shares could be as many as 202 million.

BUR intially raised $4M.

At 31/12/06, including another $12.3 million raised, BUR had $14,435,000 in cash.

At 31/3/7, BUR had $13M in cash.

At 30/6/07, BUR had $12M in cash.

At 30/9/07, BUR had $8,180,000 in cash

On 12/11/07, after paying for 3 wells, BUR had cash of US$5 or AUS$5.75M.

Therefore, BUR has already spent around $10M and say $8M starting 3 wells which may return $5M in revenue and on a operating margin of 50%, will return $2.5M in cash a year for investment in further wells.

Note: Administration costs are currently $1M a year. I cannot find any info on production costs. STX have similar producing wells in Texas. STX info is not so clear to me but there margin before tax appears to be around 56% for the producing wells, that is before exploration expenditure, amortisation, depreciating, etc.

9 firm low risk wells and 25+ in total in portfolio.

BUR have $5M in cash and $11M in options if exercised. If BUR could get nine wells in production on their current share structure and earned US$6,000 revenue a day on 350 days a year from each well and earned a net profit after tax margin of 50% (very optimistic), on 200M shares that would be EPS of 5.5 cents a share or a 55 cents share price target.

Of course, 9 wells will take another 1 or 2 years.

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My view is the road is a long hard grind for BUR. They have already burned up a lot of cash.

For me, there is easier money elsewhere.