Hi All,

Another great pick by http://www.lemminginvestor.com a small part of their analysis is below, sign up to lemminginvestor to get the full report and a lot more, very good value for money.

Emerald Energy official website http://www.emeraldenergy.com/

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At Emerald, production is rising quickly. It has roughly doubled and redoubled each half year since the original output of 750 bopd in H1 '04, and bids to repeat the trick again reaching more than 6000bopd = x8 times well before end 2005, then possibly, or nearly, double again in H1 2006.

Not many companies of any kind can demonstrate a x12- x16 times multiple increase in output over five successive half years.

Five producing wells have come on stream in only four months, and are producing 1200 bopd between them on natural flow, two at Campo Rico and three in the new field Vigia, These will be worked up to four times their current output over the next six months by fitting downhole pumps and installing proper provision for taking off this extra volume. Eight wells are envisaged for the Fortuna field in 2006, beginning with the spudding of Silphide1 at end Q4 2005

crudely speaking at current total production of 3,700bopd, they show a profit rate of $2.51m/month, which rises/falls by $53.300/month for every $1 rise/fall in the price of oil.By the end of the year if Llanos basin + Fortuna etc production increases from current 3000 to 6000 bopd, as the company has predicted, plus the constant output of 715 bopd from Gigante, my figures suggest that monthly profit rises to $4.3m/month - a rate of $52m/pa.

That's roughly 30m/pa, at the start of '06, continuing to look even better with highly probable exploration successes to come in the already proven Fortuna and El Algarrobo fields, where drilling begins in Q4 and a further 8 wells at least are planned. These wells will be low-cost, low-risk, expected to cost less than $1m each. The company has more than enough cash to fund this work. $26,346,000 at end 2004, according to Evolution and $16.5m now. However the increased rate of production and the much higher price of oil suggest H2 profits will be higher by $13m, without an increase in drilling costs, thus plugging the cash drain.

That makes an eventual 10 share price target highly plausible for a PE if rated in the high 'teens, once people stop factoring in exceptionally cautious, low prices for the price of Brent, and the company releases proper reserve figures - the Vigia field has just been assessed at 13m barrels in place and Fortuna may have 30m compared with the understated total of 13m recorded in the Annual Report.

At a modest $10/barrel in the ground, that is more than three times the company's capitalisation.The City also needs to wake up to the new management's existing, successful and repeatable strategy of drilling low cost, low risk wells in proven oil fields - six this year, conceivably more next year.

We disagree strongly with Evolution's latest forecast of only $22m sales for the FY. This is just double our figure for H1. Since production is about to double, the broker's forecast may be imputing a strong set back in the price of oil, in complete contradiction to world authorities we have quoted above on the subject



Will history repeat itself, as EEN will hopefully now be heading for the value they had 8 years ago ....

Emerald Energy

Production June 2004 700bopd, now producing 4,800bopd and a 100% strike rate seven wells from seven drilled since beginning 2004

Emerald Energy PLC
08 November 2005


Emerald Energy Plc

Operations Update

Emerald Energy Plc ('Emerald' or the 'Company') is pleased to provide the
following update:

Emeralds first exploration well on the Fortuna block, Silfide #1, has been
drilled to a total depth of 5,114ft and 12ft of net pay identified in the Umir
formation using wireline logs. The well has been cased and a production test has
recovered 38 barrels of 16.2 API gravity oil during swabbing operations, an
artificial lifting technique. The test string has been replaced with a
completion string and the rig is being released. The Company is now evaluating
various artificial lift methods to determine the best one for the well.

The planned expansion of production facilites at Vigia field is progressing and
sufficient capacity is now available to produce both Vigia #1 and #3. Vigia #2
will be tested and put on production when gathering and separation capacity is
available. The Company is now producing oil from 6 wells at a combined rate of
4,800 bopd.

Alastair Beardsall, Emerald's Chairman, said: 'The recovery of oil from Silfide
is encouraging, we are now evaluating the use of artificial lift to develop the
Silfide field.'


Enquiries: Helen Manning 020 7925 2440

Why don't we just agree to use one thread - it's not exactly overburdened with new or informative posts - I'm sick of reading the same post on all three threads.

I nominate the one simply called Emerald Energy- not this one.

sd