The chief executive of Aurelian Oil & Gas, Rowen Bainbridge, characterised 2011 as "an incredibly challenging year" which tested the company’s "courage and resilience in adversity". Those virtues wouldn’t have gone amiss with shareholders either, given that Aurelian’s share price plummeted midway through last year on news of severe operational difficulties at the Siekierki gas field in Poland. Perhaps the only good news is that the company has adequate cash resources (€63.4m) to fund its exploration & appraisal work well into 2013, which might provide enough breathing space to secure a commercially viable farm-out.
Much will depend on the Strategic Options Review currently being carried out by the investment bank Greenhill & Co. The review was set up in February to assess a wide range of options, including a farm-out, or the merger or sale of the company. Management remains convinced that that Siekierki is a "material and attractive project" despite the complex technical issues that stymied tight gas production from the first two multi-fractured horizontal wells. Investor sentiment also hasn't been helped either by the failure of Aurelian's conventional exploration programme.
Broker finnCap gives Aurelian a risked net asset value (NAV) of 32.7p a share, based on a resource estimate of 230m boe.
| AURELIAN OIL & GAS (AUL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 20p | MARKET VALUE: | £99m | |
| TOUCH: | 20-21p | 12-MONTH HIGH: | 15.5p | LOW: 3.25p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 32¢ | NET CASH: | €63.4m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 2.81 | -6.80 | -5.15 | nil |
| 2008 | 1.85 | -4.40 | -3.26 | nil |
| 2009 | nil | -2.32 | -0.23 | nil |
| 2010 | nil | -9.68 | -2.83 | nil |
| 2011 | nil | -8.65 | -1.76 | nil |
| % change | - | - | - | - |
£1 = €1.23 Aim: Oil & Gas | ||||
