Yes, and the position looks even better when you consider that...

Yes, and the position looks even better when you consider that those figures relate to the 12 month period when oil prices were averaging considerably less than current or future expected oil prices. In 2009 ROC averaged US$56.88/BBL. Over the four quarters, ROC averaged the following;

1st..US$43.12/BBL
2nd..US$53.90/BBL
3rd..US$67.68/BBL
4th..US$73.10/BBL

If ROC had averaged an extra US$20/BBL in 2009 they would have generated an additional US$72M in revenue and trading profit. Hedging would reduce that figure.

IF ROC has a problem it is their low level of reserves. They have 13.9 MMBOE as at 31/12/09 which at 2010 expected production of between 8,000-9,000 BOEPD represents about 4.5 years production at that rate. Beibu Gulf FID approval will add an additional 5.2 MMBBL to that figure giving a total of 19.1 MMBOE for about 6.16 years of production @ 8,500 BOEPD.

ROC need to get successful with its exploration. However, I agree, it appears undervalued at current prices.


Regards

SP