Lundin Oil (LOILY, LOILB Sweden) Message Board

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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Timelord who wrote (617)	6/3/1998 10:42:00 PM
From: Tomas	Read Replies (1) of 2742

Lundin Oil: Is $1.50 per barrel reasonable? Total reserves (prov+prob): 264 M boe (up from 160 M last year!) Market cap: US$400 M This means every barrel is worth US$1.50 !! $1.50? What's wrong with the reserves? Nothing! Look here: The North Sea: only producing assets (cost of production $7.50/barrel) Libya: production starts 1999 (cost of production $2/barrel!!) Malaysia: early prod. started last year, full prod. starts 2000 (prod.cost $4-4.50/bbl). Cash flow 2000/2001: US$120-150 M (oil price 15.50-17.50) = US$1.50-1.85 per share!! Assume a higher oil price ($18-19) and we are talking about cash flows in excess of $2/share. P/cf 2.5 ... These figures don't take any further exploration success into account. But the reserves in Malaysia, Libya (and Sudan) will almost certainly grow considerably during the coming two years. The above is based on Finance Director Ashley Heppenstalls calculations. Read Marcos post Message 4681918 on the Canadian Oil & Gas thread, (start reading from "Part of it is what you pay per barrel of reserves."). Then compare Lundin Oils capital/boe with the average for the other stocks! What do you say?

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