Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (107976)	8/28/2008 9:26:44 AM
From: Condor	Read Replies (1) \| Respond to of 206085

They (SE) have a lot of shares out though. 275 million.

To: Ed Ajootian who wrote (107976)	8/28/2008 2:24:03 PM
From: HotnSpicy	Read Replies (1) \| Respond to of 206085

Stratic - I just started buying them last week at $0.55 after watching for a good entry for the last 6 months. Listened to the CC today. Good overview - worth listening to. Had 3 or 4 analysts asking questions. They said today that Breagh could be the biggest dry gas field discovery in the NS in the last 10 years - at $20Mcf, that's big bucks. The first discovery well drilled last year was very tantalizing. Stratic has a modest 10% position but is meaningful for such a small company. They think that East Breagh and West Breagh are actually one field based on seismic (the implication being the field is very big). The follow on well after the current well will test that theory. Stratic is fully funded into first UKNS production. ~$100MM annualized cash flow (at $100 Brent) for a play with ~$150MM mc is good value. Especially if they can add some sizzle with exploration success. 2P after tax reserves at 10% are valued at $353MM ($1.29/sh). About half of them are in Italy with their Longanesi gas field (gas prices in Italy are over $20Mcf right now). But Longanesi won't come online until end of '10. Have ownership in some underperforming, low value gas in the Black Sea which they plan to sell. Said another owner of the field sold part of their ownership recently and it implies SE's portion is worth $35MM. Stratic has suffered along with the rest of the preproduction NS juniors. I think the UK NS juniors are the best values in the entire O&G sector - UK NS has one of the best fiscal regimes in the world. For sheer value based on cash flow and discount to reserve, Ithaca is the best play in the UK NS right now. Could generate close to $300MM cash flow next year if prices hold and they meet 10,000 bpd guidance. At $108 Brent, Canaccord is suggesting $233MM cf with 9100 bpd average production. Current mc is about $290MM. Fully funded with about $75MM in cash. Major production to start late this year and then double end of '09 to 20,000 bpd and then exit '10 at 30,000 bpd (and if current prices hold, will be generating well over $1B/yr in cash flow. And Antrim is also a great value. However their major fields come on line end late '09 (Causeway) and in April '10 (Fyne). Will go from very low margin Argentine production at 5000 bpd to 25000 bpd when both Causeway and Fyne come on line in '10. My suggestion is to buy Ithaca now for its near term production (and transformational cash flow) and then flip profits into AEN and hopefully repeat. It's a similar investment philosophy as I used on OIL - bought them at $3.50, sold a year later at $14 when they were in first production and the market revalued them as a producer. I think NS producers are GROSSLY mispriced considering their cash flow and reserve values, especially the pre production guys who are trading 1-2x annualized cash flow.