- Joined
- 8 October 2006
- Posts
- 230
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- 3
aosleung, investing in any company involves some degree of speculation on its future, obviously there is higher risk in companies not yet making money.
However I believe that AED is one of the best risk - rewards prospects available on the market at the moment.
Management have publicly announced they expect (the main risk) based on flow testing the two producing wells at at least 30,000 bopd (10M per year, do the math). Now I think there is a fair chance of the P/E on success (Eg after 1 years production) should be at least 5-8, considering that they still have 3 other zones including the large SW. They have the newly purchased field and massive exploration targets.
The exploration drilling, which will be started in the 2nd half of this year will reduce PRRT which will be large.
Its also wise to look at the downside. Even if there was massive problems (ala HDR in Mauritania), which I think is a much lower risk, as the Puffin field is in a very productive and established area, then after the initial fall I believe the share price would be unlikely to slide to under the current price, as there should be a further runup before production.
I agree with your comments, just noting why some people are so keen on the company, esp at the current price. If you could list a company which you believe should at least comfortably double in the next year, with relatively low risk, then I would be very interested.
However I believe that AED is one of the best risk - rewards prospects available on the market at the moment.
Management have publicly announced they expect (the main risk) based on flow testing the two producing wells at at least 30,000 bopd (10M per year, do the math). Now I think there is a fair chance of the P/E on success (Eg after 1 years production) should be at least 5-8, considering that they still have 3 other zones including the large SW. They have the newly purchased field and massive exploration targets.
The exploration drilling, which will be started in the 2nd half of this year will reduce PRRT which will be large.
Its also wise to look at the downside. Even if there was massive problems (ala HDR in Mauritania), which I think is a much lower risk, as the Puffin field is in a very productive and established area, then after the initial fall I believe the share price would be unlikely to slide to under the current price, as there should be a further runup before production.
I agree with your comments, just noting why some people are so keen on the company, esp at the current price. If you could list a company which you believe should at least comfortably double in the next year, with relatively low risk, then I would be very interested.