These figures were distorted by the fall-out from EU Sanctions against Syria – in December
Gulfsands is trying to secure its legal rights over the Syrian assets, while evaluating several cash-generative, non-Syrian opportunities. Operationally, though, the Syrian operation isn't in bad shape. Although working interest production shrank 17 per cent to 8,542 barrels of oil equivalent a day (boepd) in the period, gross production from the Khurbet East and Yousefieh fields had, by August, already exceeded the year-end target of 24,000 boepd. On that basis, working interest production would have outstripped 2010's rate – if production hadn't been suspended. In fact, even the curtailed ramp up at Block 26 PSC still generated 34 per cent more operational cash flow than last year, while net profits rose 23 per cent to $55.1m (£34.4m). Underlying proven and probable reserves also rose 40 per cent to 76.3m barrels of oil equivalent.
|GULFSANDS PETROLEUM (GPX)|
|ORD PRICE:||154p||MARKET VALUE:||£181m|
|TOUCH:||153-156p||12-MONTH HIGH:||320p||LOW: 124p|
|DIVIDEND YIELD:||nil||PE RATIO:||na|
|NET ASSET VALUE:||194¢||NET CASH:||$124m|
On a pre-uprising basis, Seymour Pierce estimates that Gulfsands' Syrian assets alone might be worth as much as 214p a share – there's 66p a share of cash, too. But, unfortunately, it's hard to see such value being released while the conflict drags on – indeed the shares, which have roughly halved in a year, could fall further amidst such uncertainty. Sell.
Last IC view: High enough, 170p, 14 Dec 2011