us eyes cooper, page-15

DrDann,

There has been a lot of discussion about valuations on this board in the past 6 months or so, and I have given the basis of my valuation several times previously, which is why I didn't type it all out again. I have tried a couple of different methods including forward PE and NPV and no matter which valuation method I've tried to use I get a 'hard' value of about 60c max, with everything on top of that being blue sky. Others came up with similar figures.

I'm not an expert at valuing companies by any means, but I'd argue the brokers aren't someone you should be listening to at face value either - if even half of the stocks I've bought in my investing career reached the price targets the brokers gave when I bought them, I'd have retired long ago!

You can value SXY yourself easily enough - take the cash, the CSG per GJ of 3P, and the oil per bbl 2P and give them a fair valuation. See what you get. It won't be anywhere near $1.11 per share, which means to get to $1.11 you have to include a lot of high-risk blue sky.

The final evidence that SXY is close to or at current fair value, is the fact that we get a consistent stream of good news out of the oil business and yet people are still here asking constantly why all this good news isn't moving the SP.

I give the same answer as I always do - because the SP already takes oil drilling success it into account.

The catalyst for SXY's future growth is the unconventional gas, but that's still high risk. If we can de-risk it, we'll see a major re-rating of the SP. But for now, the company is fairly valued IMO.

Watch out for an ann about a major farminee for Hornet - that IMO is going to be the next big action for the SXY SP.