I see that they enjoyed a net operating revenue of 1.8mn, but an overall net operating loss of 500k. This will improve in the coming quarter as they bring Growler-3, Growler-4 and Cuisinier-1 into production. In addition, they have 17.6 million cash in bank (courtesy of large placement to QGC), 5.7mn of which will be spent on exploration and development drilling next qtr.
Reserve certification of 120BCF (2P) net to VPE (90BCF from Don Juan and 30BCF from PL171 and ATP574P) is still on target by year end. To illustrate the potential value of that reserve, Arrow Energy has a 2P reserve of 1.4TCF, but its market cap is 2.5bn. By simple correlation, VPE's 120BCF should be worth in the region of 200mn. This compares to their current market cap of just 60mn (17min of which is cash, and most of the rest is for its oil asset). So there's huge potential for CSG value to be unlocked once they gain their certified 2P CSG reserve. This is confirmed to some extent by QGC's 50mn offer for RPM (which has about 30% of VPE's oil and CSG assets). It is worth reading QGC's qtrly report - pay special attention to the map on Page 7. Notice the entire ATP574P block, according to QGC (CSG pioneer in Australia), sits on the Walloon CSG fairway. VPE holds 30% of this block with QGC.
Then we have the upcoming 2-3 development wells + 3 high impact wildcat wells in PEL104/111. With the divestment of US assets now underway (interests received), they should be able to fully focus their attention on the CB oil and CSG asset soon.
618
VPE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
