Not that complex. Virtually all small cap oilers have been hammered down in this market. No buyers and lots of sellers. SAE has been especially hard hit because of a major institutional shareholder (Oceanic Management) selling down its holding. You can follow it from the substantial shareholder notices. They may still have some shares to sell, but that is unknown as they are now below the 5% threshold for reporting.
Value proposition is clear insofar as the production is reasonably stable at 1300bbls/d, but the fields do suffer from natural decline as this is heavy oil. But the shallow fields (low cost drilling) can be stimulated with steam when decline becomes a major issue. That practice is standard in this region.
Upside potential lies in significant acreage covering abandoned fields that became uneconomic in the sub-USD35bbl days once natural decline occurred. But there is substantial residual oil to be proven up subject to usual permitting and investment. SAE is on the verge of significant progress at Paris Valley field and others, having established baseline production from the long life North San Ardo field.
Refer Board Room Radio broadcasts for further background from company management who are generally well regarded.
regards DF
SAE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
