PSA these days, page-5

Sprout & all, some good points worth considering and some comments below wrt to my opinion,

1/ Liquidity is a fair point however I think this is a reflection of the market atm. Currently there appears little market interest in O&G and longer term thinking. The current market looks to me to be focused on trading short term or in cash until things pick up. Most analysis on the O&G companies generally blames mgt teams for SP performance but when we look across the sector most O&G are down so I think the good mgt teams are conserving cash and planning, this makes for boring SP activity
Atm I think those companies with cash imo are better off not drilling and watching for acquisition opportunities as I think it is cheaper and lower risk to buy production than drill or alternatively buy/farm in to cheap properties (value) where others have done most of the work but have run out of money.

2/ Yemen, thks for the link, I haven't looked much at Yemen as I am more interested in the GOM which is where I believe the value is and primary driver for gains

3/ Currently in this market I would stick with experience and think PSA is one of the better led and managed companies. The past 3 years imo has been tough for most O&G juniors due to access to capital so the experienced teams have focussed on cleaning up balance sheets reducing or eliminating debt and not taking on unnecessary risk. Imo the market will turn one day and the companies that have done these things will be best placed to outperform as the others will be saddled with costly debt.

The decision to not pursue unconventional opportunities by PSA is a good example of the value of experience and I believe in time when a couple more GOM wells are done it will be clear that the investment returns are much better where the coy is now focussed. The deeper conventional wells if successful have very good paybacks even at lower oil price plus there is a good mix of gas and oil opportunities so mgt can adjust the plan and react to any future price movements on either oil or gas or mix of both.

4/ An issue here is PSA has enough cash for its current plans and if successful in even a couple wells will have good returns therefore there is no need to attract financiers or trader minded speculators. This is a positive to investors but not so attractive to ST speculators looking for quick wins. The offset is the downside risk is much lower due to the cash, mgt and prospects so mgt can really just focus on managing costs and making good strategic mid to long term decisions. Many other peers that have good following have to continually waste valuable time selling their story to raise funds, if the funds run out they struggle as they can't meet their plans therefore in many ways imo the market is currently focussed on the wrong things. If we look at many peers over the last year or two we can see many good results are followed by CR's at usually large discounts and dilution. If we calculate the ratio of cash raised to Mkt cap loss I think the true value of cash is between 2 & 4 times value if it is going into good prospects and not primarily admin costs.

I should add due to a pretty dumb (in hindsight) April loss elsewhere I am not holding at present but hopefully that hasn't affected my objectivity.

All opinion based on my own research and understanding, sorry for the novel.
Cheers