I will be working on PMG next. An updated forecast will be on the website this afternoon. - Dan
BOGOTA, COLOMBIA--(Marketwire - Nov. 3, 2011) - Petrominerales Ltd. ("Petrominerales" or the "Company") (TSX:PMG - News; BVC:PMGC) is pleased to announce our third quarter results highlighted by funds flow from operations of US$196.4 million or US$1.93 per share, and an oil discovery at our Pisingo-1 location that tested over 3,300 bopd of 24 degree API oil. Production averaged 37,124 barrels of oil per day ("bopd") in the quarter and we grew our operating netbacks to US$61.11 per barrel, a 28 percent increase over 2010. Our balance sheet remains strong with a working capital surplus and full available capacity on our bank lines. This financial flexibility gives us the strength to continue to execute our aggressive exploration and development plans, specifically in the fourth quarter when we start drilling our high impact exploration prospects in the Llanos Basin Foothills, Peru and our first heavy oil horizontal well on our Rio Ariari Block.
> Cash flow per share is above my forecast
> Q3 production is below my forecast
PMG
Re: PMG
An updated Net Income and Cash Flow Forecast model for PMG has been posted to the website.
PMG is now on-track to generate over $7 cash flow per share in 2011 and over $9.50 CFPS in 2012 (based on my forecast).
BTW my 2012 forecast is slightly below the First Call forecast for earnings per share.
I cannot recall a company with such a strong balance sheet (that pays a dividend of CDN$0.125 per quarter), strong cash flow and such incredible exploration upside trading for less than 3X cash flow per share. Under normal market conditions a company with this much going for it would trade near 8X CFPS.
PMG is an "Exploration" company, so the results from quarter-to-quarter are somewhat hard to predict. I've actually been "lucky" on this one since several of my line item forecasts have been way off but my adjusted EPS numbers have been close. "Adjusted EPS" do not include certain non-cash items like the mark-to-market adjustments on derivatives or foreign exchange gains and losses.
> Unrest in Columbia during the 3rd quarter resulted in slightly lower production than what I was expecting. The labor issues have been resolved and production is back on-line.
> High water hauling costs raised LOE. They will have more water disposal wells soon to reduce this trucking cost.
> They currently get close to a $10/bbl premium to WTI for their oil. This more than offset the items above.
PMG has some very high potential wells that will be drilled over the next couple months. The heavy oil reserves on their Rio Ariari Block could be HUGE.
"The last quarter of our 2011 capital program will include drilling two large prospects in the Llanos Basin Foothills
and the Ucayali Basin in Peru, along with our first heavy oil horizontal well on our Rio Ariari Block. These
prospects have the potential to significantly increase the Company’s reserves and are in addition to our existing,
2011 exploration program of up to 33 exploration wells, up to an additional seven stratigraphic wells on our
heavy oil acreage and a further 12 development wells on our Orito and Neiva Blocks. We continue to invest in
high quality 3D seismic to grow our multi‐year prospect inventory, which currently sits at over 100 drilling
locations."
PMG is now on-track to generate over $7 cash flow per share in 2011 and over $9.50 CFPS in 2012 (based on my forecast).
BTW my 2012 forecast is slightly below the First Call forecast for earnings per share.
I cannot recall a company with such a strong balance sheet (that pays a dividend of CDN$0.125 per quarter), strong cash flow and such incredible exploration upside trading for less than 3X cash flow per share. Under normal market conditions a company with this much going for it would trade near 8X CFPS.
PMG is an "Exploration" company, so the results from quarter-to-quarter are somewhat hard to predict. I've actually been "lucky" on this one since several of my line item forecasts have been way off but my adjusted EPS numbers have been close. "Adjusted EPS" do not include certain non-cash items like the mark-to-market adjustments on derivatives or foreign exchange gains and losses.
> Unrest in Columbia during the 3rd quarter resulted in slightly lower production than what I was expecting. The labor issues have been resolved and production is back on-line.
> High water hauling costs raised LOE. They will have more water disposal wells soon to reduce this trucking cost.
> They currently get close to a $10/bbl premium to WTI for their oil. This more than offset the items above.
PMG has some very high potential wells that will be drilled over the next couple months. The heavy oil reserves on their Rio Ariari Block could be HUGE.
"The last quarter of our 2011 capital program will include drilling two large prospects in the Llanos Basin Foothills
and the Ucayali Basin in Peru, along with our first heavy oil horizontal well on our Rio Ariari Block. These
prospects have the potential to significantly increase the Company’s reserves and are in addition to our existing,
2011 exploration program of up to 33 exploration wells, up to an additional seven stratigraphic wells on our
heavy oil acreage and a further 12 development wells on our Orito and Neiva Blocks. We continue to invest in
high quality 3D seismic to grow our multi‐year prospect inventory, which currently sits at over 100 drilling
locations."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group