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Re: None

Thursday, 03/14/2013 12:41:55 PM

Thursday, March 14, 2013 12:41:55 PM

Post# of 13
A Motley fool article on POEFF/POE.v

Let's fly to the neighboring Thailand, where Pan Orient Energy (TSXV: POE) primarily operates. Its Canada-based heavy oil project is still at its infancy.

Pan Orient produces 1500 bopd (100% oil) currently. The company is debt-free, holding $143 million cash as of Q3 2012. The market cap is $180 million, and the EV is as low as $37 million, resulting in one of the lowest valuations in the sector. There aren't many oil-weighted companies around that trade at $24,700/bopd (100% oil).

The company's weakness is its 2P Reserves, which were 1.1 MMboe in December 2012. Thus, Pan Orient trades at $33.6/boe of 2P reserves, which is a relatively high metric. However, for the determination of crude oil reserves, no reserves were assigned to the new pool discovery with the L53-DC1 appraisal well in Concession L53.

The high 2P reserves valuation is also offset by the low EV/CF ratio. Based on Q4 2012 production, the company generates about $40 million in cash flow annually, which translates into a very low 1x multiple for the EV/CF ratio.

If the ongoing exploration program in Thailand and Indonesia shows some success, the company will add significant reserves, further reducing risks in its acreage. We will know more about it by April 2013 when an update will be issued.
Safe Landing