Petsec Outlines Active US & Chinese Exploration Programs
The closing months of 2007 will see Petsec Energy embark on more active USA and China exploration programs aimed at building on the Sydney-based company’s already impressive reserves growth of recent years.
Petsec’s Chairman and CEO, Mr Terry Fern, said the Company had achieved a compound annual growth rate of 38% in reserves over the past 5 years.
"This growth came from the USA Gulf of Mexico region and China - the same areas we are focusing on in the coming months with our active exploration and development programs," Mr. Fern said.
"The successful exploration in the Gulf of Mexico and China saw Petsec involved in 25 successful wells out of 31 drilled, to discover a net 85 billion cubic feet of gas equivalent (Bcfe) net to Petsec," he said.
"The robust reserves growth has been quickly translated into cash flow growth of 41% compound, with strong operating margins of US$5.76 per Mcfe and Finding and Development costs of US$2.52 per Mcfe. These metrics compare favorably with Petsec's US peers".
Share price a "deep discount"
Mr. Fern said Petsec’s current market capitalization of around A$203 million at a share price of A$1.32 was a deep discount to the Company’s Australian peers and to broker valuations which range from A$1.80 - A$3.04 per Petsec share.
Petsec has a very active exploration and development program for the rest of the year. In the US, we have 3-5 wells to test 8-20 Bcfe net to Petsec and the start of production of the six Mobile Bay gas fields at about 10 MMcfpd - being a 50% increase on current production," he said.
"Our next well will spud this week in Terrebonne Parish, onshore Louisiana, to test the 45-50 Bcfe Triple Play Prospect (~ 6.5 Bcfe net to Petsec).
In China, the drilling of 4-6 wells starts in November to test 5-7 million barrels of oil net to Petsec, followed by the anticipated Final Investment Decision to develop the 6.12 South oil field at this ROC Oil-led project."
Mr. Fern said the current opportunity to buy Petsec at $1.32 per share - a deep discount to current valuation - also captures the targeted growth of this exploration and development program.
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