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||EPS - Basic
||Market Cap (m)
|Oil & Gas Producers
Real-Time news about Solana Res (London Stock Exchange): 0 recent articles
|norman the doorman: With RE: to test rates.
8000 barrels would be good fortune! Over the long term, that rumour should add a couple of dollars to the share price, and perhaps increase the chances of success for Costayaco -3. Solana was trading at $2.20 on Dec.11, when Costayaco -2 was spud, and has added $.60 / share on speculation of Costayaco -2 success.
With Solana trading at $2.80 this equates to specualtion that Costayaco -2 will add production of 1,600 bopd gross (800 bopd net to Solana).
Value of Costayaco-2 from production in bopd.
$70 net price x 800 bopd x 360 days / 126 million shares FD = $.16 net revenue x 4 times multiper = $.60 share .
$70 net price x 2000 bopd x 360 days / 126 million shares = $.40 net revenue x 4 times multilper = $1.60 share
$70 net price x 3000 bopd x 360 days / 126 million shares FD = $.60 net revenue x 4 times multipler = $2.50 share.
Nicked off architect again off the Investors village site.
Dont forget though that production rates are often only 40% of the test rates.
Im fairly positive the results will be good but the longer the wait the more nervous I get.
The real deal will be the size of the prize with C-3 and the detail in the 3D seismic they have shot.|
|norman the doorman: Sold 10% of my holding as well, wanted some cash for PET. Noticed SORL has done 244% YTD and is the 8th highest % riser on the LSE. Still only 274 posts though.
Stolen off the Investors village site by ARCHITECT.
GTRE 'netbacks" speadsheet includes operating costs, so it's net revenue (price/net revenue) if the operting costs were not deducted a multiple of 3.5x, might be more appropriate. Since operating costs are deducted, a multiple of 4x seems reasonable as general guidance, for a "back of the envelope" valuation.
Solana spends $4 million a year in operating overhead, $4 million in G&A and averaging 3500 - 4000 bopd they should be profitable. At say 5000 bopd, Solana might turn an annual profit of .50 / share then a price/earning (PE) mulitiple of 10x would yield a $5 share price.
Dahlman Rose recent report uses a 7.9x price-to-2009 net cash flow multiple, which is derived from the E&P peer group average. Dahlman Rose projects their $4 price target (GTRE). The Dahlman Rose report estimates $0.51/share in 2009 cash flow. 7.9 x .51 equals $4. I'll assume Solana's operating overhead and G&A will increase 125% from $8 in 2007 - $18 million in 2009. $18 million added to $67 million (.51 x 133 FD shares) = $85 million in net revenue. Assume operating margins improve significantly about 70% - 80%, as production increases.
Working backwards from Dahlman Roses report, $85 million net revenue / 360 days / $60 "netbacks" requires production of 4000 bopd 2009 to support their price target of $4. I used $60 netbacks, assuming operating costs will increase 125% from $4 barrel in 2007 to $10 barrel in 2009 (due to increased rilling and infrastructure investment in the Putumayo basin) and oil prices will average $90 / barrel thru 2009E.
$10 / barrel in production costs x 1,000 bopd x 360 days supports a field operations budget of $3.6 million.
$10 / barrel in production costs x 10,000 bopd x 360 days suports a field operations budget of $36 million.
Costayaco -1 generates net revenue of $80 million /year ( $40 million net to Solana) compare that to Solana's net revenue in Q3 2007 of $3.1 million. Solana could continue to grow revenues expondentailly, with a succesful 2008/2009 drilling program.
I use a 6.5 x multiplier for "price/net cash" flow ratio - 4 x multiplier for "price/net revenue", and 3.5 x multiplier for "price/gross revenue". Either way it yields approximately $1 / share for 1000 bopd, discount the $1 8% to service the debt and increase the discounted percentage if Solana draws on debt for field operations and doesn't discover oil.
Petrominerales PMG is good one to look at- Q2 2007 PMG reported 2850 bopd production with $6 in production cost and + .13 / share in profit with the average price of oil WTI $58 / barrel, Q3 2007 they reported 4500 bopd with $7 in production costs and +.11 / share profit with an average price of oil WTI $68 / barrel. Petrominerales' PMG operating margins were better than Solana's and Gran Tierra's on 2800 bopd, as PMG reported a +.13 profit on 2850 bopd, and SOR and GTRE are "breaking even" on 2800 bopd. When Solana's Q4 2007 financials are reported, compare to PMG's Q2 2007 report, to see if Solana is " on-the- path to profitibility. I believe PMG and PBG share some G&A and or personnel expenses, in any case, PMG was "lean and mean" to turn a .13 quarterly profit on 2850 bopd.
Given the current share price, there are four conclusions:
1) the market hasn't priced in much, if any, forward production growth above 3000 bopd thru 2009, or
2) the market expects Solana's production costs will increase above $10 / barrel, ie. Solana and Gran Tierra will incur significant capital investment cost in the Putumayo - building pipelines, flowlines and increasing the capacity of the processing facility, and then not discover a significant amount of new oil. The same analogy could be applied to the Llanos basin.
3) the investment for field operations plus capex cost for costayaco 2-7 are significantly more than $72 million / year ($36 million net to SOR)
4) The markets are wrong on this one, or expecting the price of oil (WTI) will drop to $60. I believe Tristione uses $57 as the average price of oil (WTI) thru 2009E.
Take your pick from the above options. I prefer No.1. :)
( although a short crude hedge may be sensible. )|
|someuwin: Part of Broker coverage found on stockhouse.com...
September 19, 2007 Summary Note
Please See Full Report for More Detail
Energy Foreign Producers
SOR, TSX-V C$1.85 12-Month Target: C$2.75
SORL, LSE-AIM 87p Rating: Overweight (Speculative)
Potential Return: 49%
Market Cap (F.D.): C$204 million
All values in US$ unless otherwise noted.
Key Metrics (2008E)
Production (Boe/d) 2,695
EBITDA (MM) $24.1
Capex (MM) $40.6
Net Debt (MM) $17.0
Investment Thesis Solana Resources Ltd. (Solana) is a Canadian-based energy company with a focus on
acquiring and developing oil and gas properties in Colombia, South America.
A new senior management team took control of Solana in October 2006 and refocused company
efforts on high-working-interest, high-impact, low-royalty properties in four prospective basins
in Colombia. As a result, a six-well exploration program was initiated in Q1/07.
The company has drilled five wells to date, resulting in two significant new field discoveries
and one potential new discovery.
The new field discovery wells (Costayaco-1 and Juanambu-1) tested at a combined rate of
6,782 Bbl/day of medium-gravity oil (20°33° API). The company expects to be producing
from both wells in Q3/07. The potential new discovery well (Tres Curvas-1) indicates
reservoir-quality sediments in six separate zones that will be tested over the coming month.
By our estimation, the full value of the company's recent discoveries is not being recognized
in the current share price. We believe that there is the potential for significant near-term
value addition as the company continues its drilling and testing program.
Valuation We model a FDNAVPS range of C$2.32C$3.12 and set a 12-month target price of C$2.75,
based on C$1.94/share (FD) for our base-case valuation plus C$0.38/share (FD) for the Tres
Curvas and Cocodrilo prospects and C$0.40/share of upside value from the Costayaco Field.
Catalysts Events that could act as catalysts for share price appreciation include:
− Testing results for the Tres Curvas well in the Catguas Block (October 2007)
− Drilling results for the Cocodrilo well in the Catguas Block (November 2007)
− First production from the Juanambu field (September or October 2007)
− First production from the Costayaco field (October 2007)
− Additional drilling and testing in the Costayaco field (November and December 2007)
− Future exploration success in the Putumayo, Llanos and Catatumbo basins
Conclusion Drilling and testing over the next three to six months should provide additional clarity on the
recoverable reserves in the Costayaco field and the Catguas prospects. We recommend that
investors take a position in Solana before news is released, as we believe there is significant
near-term upside that is not currently priced into the stock.
We are initiating coverage of Solana with an Overweight (Speculative) rating and
12-month target price of C$2.75.|
|littleredrooster: The share price has also risen sharply in Canada today. So it would appear that the news was also mostly missed there on Monday.|
|littleredrooster: EERG shares are now eligible for settlement on Crest. The share price was $0.50 when I first expressed an interest, quickly rose to $0.65 and closed yesterday at $0.26. One has to laugh.
I will now try to make sense of this announcement.
|littleredrooster: More good news, Jumbo. The Laurel Valley drilling was a failure, the EERG share price has collapsed, and I never managed to buy any shares. Talk about being lucky! lrr|
|littleredrooster: What do you do if the shares aren't traded on CREST?
It's rather frustrating. I tried to buy EERG shares on Monday when the share price was $0.50, but discovered that I couldn't. The closing share price tonight was $0.63. I've therefore missed a rise of 26%.
|tuckswood8: Added a few this morning but two more limit orders inside the spread failed.
I feel that the enormous spread is going to prove a barrier to further progess over here.
Should have bought on news of director purchase but like others I was wary of the general retracement in the markets.
I will now look for a drop-back in SORL price to add more, but if the mm's want to make money from this share they have to reduce the spread.|
Solana Res share price data is direct from the London Stock Exchange