J.
Thanks for the Vanguard link. This is an excellent company to compare SIY to. Nice website.
vanguardoil.com
Common shares outstanding as of 1st Q 72,524,000
VA has no debt
Here's a rough cash flow projection on VA.
Brent (est price) $27.00USD
VA has 50% Working Interest
$27.00USD x 50% = $13.50USD
$13.50USD x 1.49 (est rate) = $20.11CDN
$20.11CDN x 522BOPD* (as of July 31/00) = $10,497.42
$10,497.42 x 365 = $3,831,558.30
$3,831,558.30 / 72,524,000 (shares) = $.05/share cash flow
$.05 x 6 (average multiple) = $0.30 cash flow evaluation.
Current price $0.50
Compared to SIY
scimitar.ab.ca
SIY is based off a $6.00 discount to Brent pricing
Brent (est. price) $27.00USD - $6.00USD = $21.00USD
SIY keeps 75%
$21.00USD x 75% = $15.75USD
$15.75USD x 1.49 (est rate) = $23.47CDN
$23.47CDN x 1900BOPD (last press release) = $44,593.00
$44,593.00 x 365 = $16,276,445.00
$16,276,445.00 / 38,983,142 (shares) = $.42/share cash flow
$.42 x 6 (average multiple) = $2.52 cash flow evaluation.
Current price $0.50
Now, I am in no way saying that VA is not a good investment or company. This is merely an exercise to compare c/f between similar companies. In Vanguards c/f model, I used Brent at full price. I'm not sure of the quality of their crude until I talk to their IR. Also, VA's working interest is 50%. Do the Egyptians get another cut off the top? Again, I won't know until I talk to IR. The above 50% is a 'best case' scenario as is the Brent pricing. VA also looks to have some other projects on the go so I'm sure their c/f per share will improve with time.
Now, am I somewhat accurate with this comparison? If I'm close .......then how does SIY look? Does SIY look even better with the upcoming Thermal project in August that's going to tackle the 545 million barrels of proven reserves (Ryder Scott)?
Any comments are welcome!
*Note
VA averaged 805/402.5 BOPD during the first quarter but production has decreased due to mechanical/pump problems. Looks like SIY isn't the only one with mechanical/pump problems in the patch! |
