Haven't seen the F/M report and don't see a link on the stockhouse bullboard or the company website.
My concerns would be the 24api oil, which is going to have a significant discount to Brent, maybe in the mid to high $20/bbl, low 30's. North Sea oil, with $500K/day drilling rigs and FSPO rental rates and weather issues isn't cheap oil. It has to cost something north of $25/bbl to produce.
If that is the case, it doesn't matter if they are producing 7500 or 75million, they ain't gonna make a lot of cashflow or profits.
It looks tempting but what if oil doesn't bounce higher? What is IAE worth at today's oil prices?
Does F/M use $40 oil with a medium heavy oil discount, in their cashflow projections for IAE? If so, how much cashflow will 7500bpd generate for IAE? Is the next field coming online in late 09/early 010 going to be light sweet and get full price? Cost of production and the net cashflow are going to be extremely important for all producers and you need very low costs for producers to continue forward. I thought 30,000 bpd would carry OIL.to to the finish line and get them financing to wait out the oil prices. Didn't happen and stock cratered. I wouldn't want to take another flyer into the same soup bowl unless I was damn sure these guys had something a lot better than oil.to.
Bobwins
BTW clean balance sheets and cash are king. Debt is the killer until we get out of this financing nightmare.
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