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 : Pacific Asia Petroleum (PAP) -- Ignore unavailable to you. Want to Upgrade?

To: loualbert who wrote (5)	12/2/2009 10:10:36 AM
From: architect*	Read Replies (1) \| Respond to of 12

Thank you I'll try an listen to the conference call on Pacific Asia Petroleum PAP, I have a few questions? PAP recent news to acquire a 60% interest in the Oyo oil field off-shore Nigeria for 63% of the company's stock (26 million additional shares?) is interesting. ENI a European major E7P is the operating 40% net JV partner on the Oyo oil field. I've seen reserve number on the Oyo oil field of 50 - 100 mmbo. At 60% of 50 mmbo - $12 /bbl 2P NAV (-10%) on 30 mmbo is 360 million the 2PNAV would underpin the new market cap that I'd estimate at $320 million. If the Oyo oil field is 50 mmbo then the play is perhaps fully valued for PAP on a 2P NAV,somewhere around $380 million with the new 26 million shares, and $38 million payment however, if OYO is bigger than 50 mmbo then Pacific Asia would be making a great deal. Oyo was discovered in 1995. It looks to me that most, if not all of the CapEx on the Oyo oil field has been paid by the seller (CAMAC) of Oyo. Oyo production is set to begin in may 2009, and could be in the 40,000 bopd range, and with most of the CapEx paid for, the production operation will be a total cash cow for this small cap company. PAP's management team is ex- Texaco management. I'm not wild about the rest of their long range business plan, as it all early stage, and not that well defined. Oyo is a deep water operation where a 50 - 100 mmbo is marginal which perhaps explains why its taken so long to develop the Oyo field for production, profitability requires high oil prices and lots of capital investment. If most of the CapEx has been made then Oyo will become a cash cow, although most deep water fields require hundreds of million in CapEx to get into production.