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Sydney, April 16, 2008 AEST (ABN Newswire) - On a fully diluted basis, Mosaic (ASX: MOS)(PNK: MSAOF) has a risk adjusted target value of 24 cps. Strachan Corporate calculates that net of corporate costs, Mosaic Oil has an underlying value for its hydrocarbon reserves and infrastructure assets of $93 million, which is 33% above its current market capitalisation of $70 million. In addition, the company is assessed to have risk adjusted value of $64 million for its exploration assets in Australia and PNG.
- The company is well funded for a two year programme of field development and exploration, aiming at more than doubling current production. The company has identified more than 60 leads and prospects on its Surat/Bowen permits, of which about 30 are ready for immediate drilling.
- Access to owned or partially owned processing and delivery infrastructure reduces operating costs and ensures rapid payback for even small additions to reserves.
- The company currently trades with an undemanding enterprise value per barrel of oil value equivalent of around A$12.80, which is about half the rating of its peers.
- Surplus cash flow arising from developed projects, post 2009 will support new growth orientated business ventures, which the company is now pursuing.
For the full research report by Strachan Corporate Research follow the link below.
