Notes
TAG Oil Ltd. (TAOIF) is a Canadian company producing and exploring for oil and natural gas in New Zealand.http://www.tagoil.com/
Fiscal year ends in March.
1-5 reverse split in Feb. 09. Symbol changed from TAGOF to TAOIF.
5AUG08 - $0.10
Shares outstanding: 93 million (fully diluted). So, at a dime a share, the company is valued at $9.3 million.Its main asset is the Cheal oil field, in which it has a 30% interest.
From a recent report:
"An independent assessment of reserves conducted as of March 31, 2008 has assigned a present value to TAG's share of proved and probable reserves located at the Cheal oil field of US$28.18 million, based on year end oil prices and a 10% discount rate. The assessment has assigned gross proved and probable reserves within the Cheal oil field of 2.783 million boe.
(Note: a barrel of oil at the end of March was roughly $115.)
"During the 2008 fiscal year the Cheal oil field produced 169,737 gross barrels of oil; 154,240 gross barrels were sold with oil prices averaging $87 per barrel. Royalty and production costs averaged $37 per barrel, resulting in a net back per barrel of approximately $50.
"TAG recorded $4.1 million in production revenue for the year which is an increase of more than 400% from the 2007 fiscal year. The net loss recorded for the year amounted to $7.98 million, primarily as a result of a $6.56 million write-down related to capitalized property expenditures incurred in prior years and non-cash expenses such as depletion and inventory write-downs amounting to $1.55 million.
"Daily production rates from plant start-up to year end averaged 465 barrels of oil gross per day; currently the field is producing approximately 450 barrels of oil per day.
It's often unclear whether they are talking about totals or Tag's share, in the above numbers.
No debt.
A $9.3 million dollar company owns $28 million in oil & gas (discounted). Assuming $87 oil, at the 50/87 ratio of the last year, that's $16 million of "net back". Seems like a good deal.
15OCT08 - $0.06
Market cap. at current price: $5.6 million
March 31, 2008, annual report (Canadian dollars)
* Tangible book value: $32 million . It was $40 million the previous year.
* Annual revenue: $3.9 million
* Cash burn: $6.6 million
* There was a $6.5 million write-down.
Thoughts.
Assume $60 oil instead of $87. Then Tag's proven and probably reserves are worth $19 million. A $5.6 million company owns $19 million in oil & gas and CDN$32 million in equipment and cash.
17FEB09
As of December 31, 2008 has assigned a present value using a 10% discount rate of $3.9 million to TAG's share of proved and probable reserves located at Cheal. In addition, gross proved and probable reserves estimates of the Cheal pool have been reduced from 2.783 million boe at March 31, 2008 to 510,000 boe.Thoughts: management is completely unreliable. Tag's "proved and probable" reserves declined over 80% in one year. Not very "proved," were they?
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