Greg/Kerm / Niko Resources NKO - TSE
It's my perception that Niko has been waiting for operations to commence at the Hazira field for some time - that time is apparently over. Comments/input is appreciated as always.
This company has a great story going for it. I'm long as of today at $4.95. Here are some figures/stats put together by a contact of mine:
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NKO Toronto Hi $5.70, Lo $3.85
24.8 mm O/S, 27.6 mm FD
Debt free except Nigeria-related which is for sale. ($12.3 mm at Dec 31,98).
Future development is financed from cash flow.
HAZIRA GAS FIELD, shallow water near Surat, India.
33% operated interest. Reserves exceed gross 1.6 TCF. A cyclone blew thru here 3 weeks ago, with minor damage.
Net 16 mmcf/d now from 6 wells; new plant can do 125 mmcf/d.
Net 32 mmcf/d in August without more wells, with new 8-inch line.
Net 100 mmcf/d in December/99, with 8 new wells.
Net 150 mmcf/d in June/00 with 8 new wells.
Net 300 mmcf/d Dec/00
British Gas just finished 18-inch line, capable of 250 mmcf/d
Industrial buyers will have Aug finished on 24-inch line, 250 mmcf/d
Niko will build a 16-inch line, 300-400 mmcf/d.
Gas receives Cdn $5.00/mcf, new industrial contract.
$0.05 / mcf op cost
300% capital recovery before income tax of 48%, no royalty.
After peaking at 300 mmcf/d, production stays flat for 10
years.
NAV at 10% flat prices is $21.00 (Chapman Engineering)
CFPS $0.76 in 1999, $2.45 in FY00 with 175 mmcf/d (implies FY01 over
$3.50/sh); EPS of $0.43 in FY99 and $1.87 in FY00.
Drehaus was a major shareholder, with 1.5 mm shares, but has been liquidating.
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I make no guarantee of the above information, though it is deemed highly reliable. |
