Forecaster,
Here is a project for you.
Reading through the annual report it says that. "Overall, these developments should result in a reduction of export discounts of up to $6 per barrel" (referring to transportation costs in 2002)
Also listening to the conference call it was said that production should be around 180,000 barrels per day in the next couple of years up from a current 100,000 or so.
So if we plug in a savings of $6 per barrel times a current 100,000 barrels a day you get $600,000 which is $219,000,000 in savings a year. At 180,000 barrels per day that comes out to $1,080,000 per day and $394,200,000 per year in savings. These are HUGE numbers.
So what kind of earning numbers do you come up with when you factor in this production increase and transportation savings? This is assuming that oil prices remain constant of course.
Just thinking here, if the $200,000,000 distribution to shareholders equals about $4(C) per share, then we are talking about $4 a share in extra earnings maybe when you factor in the transportation savings and the production increase?
Still thinking, so they are on track to make $2.67 for this year or better and add that to the $4 in savings and production increases next year gives them earnings of around $6.67 for next year or so. That times a multiple of 4 or so give us a $24 stock or better and this could be conservative. Have I missed something?
Thanks,
Paul |
