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....or four Egina's taking-up station on LanFax (next year)...........
gla
EPS and P/E ratios are broad indicators used by many investors, you are right that they alone don't precisely measure the overall health of the company. Quite often the P/E ratio will be low for companies thought to be in trouble and high for those thought to have a bright future.
However HUR is not yet seen as an oil production company (thus measured primarily by P/E ), it is still an exploration company and thus its main value driver will be its assets (2p, 2c resources, etc.) If HUR is not taken out in next 12 months time it will likely be based on its asset/resource value , however if no take over then the market may well begin to value it more as a production company (albeit with a strong asset base)!?
Excellent post G15
Correction ; c. $250m, not 425m.
EPS is NOT calculated net of capex, but for that reason it is a flawed indicator for valuation purposes, if net cash at bank is being drained by capex, all the EPS in the world will not make a profitable company, as many shale players are finding out.
I'm just pointing out that you cannot arrive at a company valuation based on EPS, if you ignore present and future capex.
The value of this company will be based not on the financial flows from EPS, but on the huge potential reserves it proves up.
Cash from the EPS strengthens the company's hand, in that it gives a planned route to self financed FFD ; but key to seeing full value here is the arrival of FO or TO offers, imho
Not convinced EPS is calculated net of capital spend (which is utilisation of income.)Maybe a qualified investor/accountant can confirm one way or the other.
Be careful making one sided financial assumptions.
Cash flow of c. 425m is net of opex, but not necessarily net cash to the bottom line ; there are costsbeing incurred already (must be!) for the progression of the gas solution, and planning for drills next year, which will eat into that cash this year, and even more next.
We don't know by how much, bcos HUR have given no budgetary projections. But it is futile to make EPS (Earnings Per Share) projections without knowing capex plans.
And btw, AS has made clear that any incone from gas sales will be minimal given the current price at Sullom Voe, calling it a "black oil enabler only".