Actually Steve, you wrote:"Stocks trade with a PE of about 16 on...

Actually Steve, you wrote:

"Stocks trade with a PE of about 16 on average, that means the stock price is 16 times the Net revenue."

Strayda is right in pointing out for other readers that PEs use earnings and not net revenue.

You also wrote:

"The market is screwed, ALL stocks are down."

Clearly not ALL ASX stocks are down. Those that continue to produce good results or exceed the market's expectations have been treated much better than others (generally financials, LPTs, most small-caps) that have been battered about. There are a number of stocks that have not faired too badly (and some quite well) over the past few months. While most are off their 52-week highs, some have recovered substantially from recent falls and many have gone on far exceed their prices of a few months ago.

The softness in the BUR price could be due to many things:

- light volume
- disappointing, earlier/quicker-than-expected drop off in flow rates from first 3 wells
- little market patience for even average results
- some scepticism towards the M1 flow rates

Without any additional news to get excited about, time is needed to see the results of any sustained strong M1 flows drop down to BUR bottom line (at least cash flow, and maybe even profit) for the market to get too excited and start to believe that BUR's results are sustainable.

Another M1 in quick succession might do it. Not sure if the upcoming 3QFY08 cash flow result will be overly impressive (though recent strong gas prices will help - maybe someone who has done some reasonably reliable numbers on this might have something to add here).

The strong AUD is also likely to be having an impact on investors' perceptions of Aussie US-based oilers.

As for BUR trading on a PE of 16, it has a long way to go for that to happen. Firstly, BUR would have to start generating some earnings. Next, the market would have to be convinced that these earnings are sustainable - ie that gas prices would remain elevated and become less volatile, that BUR's flow rates would remain strong and long-lived, that BUR's revenue stream becomes more diversified (ie not a one play pony) and that BUR was not subject to significant cost pressure. Given at least a couple of these factors are unlikely to happen any time soon, I suspect investors would be very fortunate to see BUR trading any time soon anywhere north of a PE of 10 for any length of time.

I continue to hold, but agree with Neil that price catalyst likely to be the release of results next quarter in the absence of any significant new developments (eg new wells, corporate activity). Hope I'm wrong and the market suddenly takes a shine to continued strong flows from M1.

Any, and varied, alternative views welcome...