Hawkley Oil and Gas (ASX:HOG) continues to show up the rest of the junior ASX-listed oil and gas groups with the cashflow generation capability of its Ukraine project.
It?s just done what was expected by committing to spend no more than $3 million building its own gas processing plant for its Sorochynska production licence.
Apart from saving some $300,000 a month in processing fees ? giving the project a 10 month payback ? the standalone plant will remove the restriction on Sorochynska?s current daily production of 7.5 million cubic feet of raw gas and 200 barrels of condensate (light oil).
Daily capacity will grow to of 30 million cubic feet, with attendant condensate. That means Hawkley will be able to take greater advantage of the reserve base at Sorochynska which was recently upgraded to 46 billion cubic feet of gas and one million barrels of condensate.
In the meantime, Hawkley is planning a repeat performance to its reworking of Sorochynska with the current drilling of the Chernnetska prospect. The primary target should be tested in August.
Ahead of the decision to build the standalone gas plant, but with the expectation that it would go ahead with the project, Hawkley was the subject of a 3 month price target by stockbroker Hartleys of 66 cents a share. Yesterday it closed at 34 cents a share.
