As oil prices keep moving higher STP own earnings from the Senlac cash flow will improve even further. Not entierly unlikely e.g. given the very harsh weather conditions now ww and thus the preassure on energy prises we'll see oil fast approaching $90-95. That means more buck to STP.
http://finance.yahoo.com/tech-ticker/oil-could-%22easily%22-hit-90-energy-key-to-2010-stock-market-philip-roth-says-398793.html?tickers=xle
Interrestingly enough and in the most recent Canaccord Adams sensetive analysis page 12 the following is stated:
"Southern Pacific’s contingent valuation is very sensitive to changes in the assumptions used for commodity prices. The long-term crude oil price assumption used to derive our contingent asset valuation is US$70/b for West Texas Intermediate crude oil."
and then the conclution based on this assumtion is:
"Our target price of $1.50 is based on 1.1 times our estimate of net assetand contingent asset value for Senlac and McKay."
However when in the very same sensetive analysis on page 12 an oil price of $90 is applied then they conclude a STP SP is equivilent of C$ 2.15.
Bottom line - with higher oil prices more cash flow ad higher SP valuation potential for STP.
Then this for sure was quite an interresting article:
Southern Pacific’s CEO Byron Lutes is profiled in the January 2010 issue of Oilsands Review
http://www.shpacific.com/wp-files/Presentation/STP-oilsands_review-2010-01.pdf
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