new gom leases

Seems like the market missed PSA 's report today that it had been successful at 19 March MMS sales in acquiring two new Vermilion leases. This gives PSA three leases, one to the south and two to the east of the Chevron gas fields in Vermilion 245. These fields have been prolific producers for Chevron and are thought to be reproduced in the leases now held by PSA. They will be targeting gas in quantities significantly larger than West Cameron but in deeper sands which will accordingly be higher risk plays. It is possible that PSA will farm out part of its interest to share this risk.
According to company West Cameron is continuing to produce at rates close to the capacity of the production platform (40 mmcfpd) and continuing high pressures in producing sands appear to have defied expectations of a decline in rates. Although Henry Hub prices are back in the $US 5 .50 range it should still be another good month for PSA with net revenues to the company in the $US3.5-$US4.00 million range by my reckoning. While the company does not produce the extensive quarterly cash flow reports others do it is in the habit of including any significant financial information in its quarterly activity report. So I would expect PSA to report revenues of between $A14 -$A15 million in April. Cheers all. Suggest you top up. Vermilion is a prize catch. JBC