I received a newsletter from Commsec today. You all may care to...

I received a newsletter from Commsec today. You all may care to read this:

Roc Oil Company ¡V Why Has Roc been so badly trashed?
Last Traded: $0.61
Market Cap: $162m
Sector: Energy Summary of report dated 29/10/08
ACCUMULATE/MARKET PERFORM
Valuation: $1.33
What¡¦s new On 28 October 2008, ROC filed its quarterly report for September. Operations
„o Reported production was 915kboe or 9,952boe/day. Production was boosted by the inclusion of ROC‟s share of the BMG field which was acquired through the acquisition of Anzon Australia (AZA) from 8 September 2008.
„o ROC drilled two exploration wells in Angola and both were dry.
„o The oil price averaged $118/bbl during September and has averaged $113/bbl year to date. At the time of writing, the current oil price was $62/bbl.
„o Despite the high oil prices, ROC‟s net debt has been reduced by only US$ 8m over the course of the year.
Investment review
„o ROC‟s share price has collapsed, from over $4.00 in July 2006 just after the acquisition of Zhao Dong.
CommSec maintains that ROC‟s acquisition of AZA has destroyed shareholder value. This is due to the capital involved, which is estimated at being up to $A 1,230m for field development plus US$ 400m for a larger FPSO, this estimate factors in CommSec‟s assumption of $65/bbl as the Long Run oil price.
CommSec‟s valuation is now $1.02. While we had previously stated that in the event of the failure of Bazzard, that our valuation would fall to $1.17, we have had to factor in the much lower short term oil price. CommSec‟s our revised valuation of $1.02 is still well above the current share price.
„o ROC closed at 46c yesterday, having under-performed all relevant comparatives over the last two years and especially the last month.
„o Since initiation of coverage, CommSec has maintained that ROC‟s aggressive exploration programme has destroyed shareholder value.
„o ROC has since stated that it will be looking to do more of its exploration drilling by attracting farm-ins.
„o CommSec maintains that ROC‟s acquisition of AZA has destroyed shareholder value. This is due to the capital involved, which is estimated at being up to $A 1,230m for field development plus US$ 400m for a larger FPSO, this estimate factors in CommSec‟s assumption of $65/bbl as the Long Run oil price.
„o In our note of 27 August (Too badly beaten up), CommSec revised its valuation of ROC to $1.33 per share.
„o CommSec maintains its ACCUMULATE / MARKET PERFORM recommendation on ROC