Q: Your thoughts on Southern Energy quarterly results and also what you think of there management? For higher risk is this a good N. Gas, LNG play in the US or do you have better ideas?
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5i Research Answer:
Q1 loss widened to US$3.1M or 2c per share, from a loss of $1.1M or 1c per share in the prior period. Oil and gas sales were $4.8M, down from $5.2M. Cash flow was $2.2M or 1c per share, up from $1.7M or 1c per share. Estimates were not available. Production rose 15% to 18,055 Mcfe/d. Gas prices have recovered from the lows, and thus the outlook has improved. It is quite a small company, with leverage, so risks are very high. We would like to see a better balance sheet, and generally we are extremely cautious with companies with a market cap of only $39M. Insiders own 5% and we would give managment a 'B' rating. We would prefer LNG though it is $36B. NEXT is interesting as a $2B mid cap.