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Gold/Mining/Energy : Pan East Petroleum PEC-TSE Several Projects Starting
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To: Syncrude who wrote (23)8/22/1997 11:37:00 AM
From: D.E. Shetland   of 73
 
Patience does seem to be wearing thin, however, they are not even halfway through the drilling program for the year. Since we don't know the flowrates and potential reserves from the successful wells (which so far have out-numbered the dry wells) the impact to cash flows isn't known. No doubt, any wildcat exploration play is high risk/high return. I would guess a hit rate above 30-40% would be considered good. Their problem has been hitting a gusher. Expectations were built up for Edson/Ansell, then Berland, now Bullmoose. For all we know, Tony Creek is a real good one. It's not uncommon for data to be kept low in areas where the play can be expanded with farm-in's or land sales. So that could be good news. But your right, I don't think I've ever though it's wildly cheap, there's some hope in it. That's why I put the downside around NAV of 2-ish. There's still plent of land/leads/other deal flows to justify a slight premium, but maybe not where it is now.
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