Baggerhopeful wrote: This is a very attractive business model should Giken be able to ramp up its acquisition and development within the near term. The development of Old wells essentially taking out the E in E&P as exploration conducted years ago have predetermined the existence of oil. That said, drilling/restoring the wells are relatively low risk. However, I feel that costs could vary greatly should the well be badly damaged and requires additional drilling/increase in pumping......
I disagree with the osk analyst in saying that Giken is severely undervalued. As a relatively new player, track record and ability to secure more contracts will lead to a re-rating. As of now, I am waiting to see if management can continue its aggression expansion and maybe reward shareholders when the FY ends.
Baggerhopeful, you disagree that GSS is severely undervalued. May we know what you think is the "fair value"? Could GSS at 21.5 cents currently prove to offer significant upside of, say, 50%? Target 31 cents?
Current headwinds in the share price is due to the uncertainty in oil prices. As mentioned before, I like its business model with a strong cash flow generation and a fixed selling price. However, I do hope that the company will provide shareholders with frequent updates on oil production figures to keep abreast with the company's operational status. I am also betting on Pertamina keeping the current sale scheme in place as the local communities are beneficiaries.
Prior to the release of the results and oil production figures on 11th May (guided by IR), I would say that a fair value of $0.25 should be ascribed to the share. Re-rating catalysts going forward includes strong production figures and a locked-in sale price.
26 cents now! Still cheap considering that its sale price in rupiah to Pertamina is fixed. When re-contracted, the price in rupiah will be only slightly lower as the favourable forex rate comes to the rescue!