Diaz Resources Ltd (fka DZRFF)

[DigiTech]

Here is a repost from VMC

I just realized that DIAZ had its own Board on IHUB. Readers may find my post interesting.


DZG estimates for 2006.

Bobwins, Do you have any comments about the numbers I got from DZG (post 24735). Does it match your estimates?

I tried to use my calculator to estimate 2006 and the numbers scare me (in a good way)
Could you check if I am wrong before I spend a lot of money in the morning.

Also could you please give me your comments about the idea of spliting the company. By the way I forgot to mention that they intend to do that in the next 3 month.


Run rate Jan 1st 2006 2000 EBOD (per DIAZ estimate)

Gas is 87% of production (extrapolate from 1st half of 2005)

Gas price $C 12.00 (average US and hedged Canadian production)

Gas revenue Q1 2006 10440*12$*92days= $11.5M
Oil revenue Q1 2006 260*60$*92days= $1.4M

Total Q1 $12.9M



Assuming per my discussion with them today an increase 4MMcfd average per quarter and a flat gas pricing of $c12 (could be better with Texas unhedged)
Assume no increase in oil production and $c60 per B



Gas revenue Q2 2006 14440*12$*92days= $15.9M
Oil revenue Q2 2006 260*60$*92days= $1.4M

Total Q2 $17.3M

Gas revenue Q3 2006 18440*12$*92days= $20.3M
Oil revenue Q3 2006 260*60$*92days= $1.4M

Total Q3 $21.7

Gas revenue Q4 2006 22440*12$*92days= $24.8M
Oil revenue Q4 2006 260*60$*92days= $1.4M

Total Q4 $26.2

Total 2006 $c78.1M !!!!!!

If I take 2004 as business model. The revenue is 4.4 times so earning would be $c6.8M. I added 3.45M because their SG&A would only double on 4.4 X the revenue (IMO)

Total earning $c 10.25M

Shares after the buyback 59m
EPS 17c for 2006

PE of 10 $1.77 per share
PE of 20 $3.54 per share

If you run rate Q4 for 2007 it gets really good


BG