Sterling say cash flow will increase by 400% in 2006

Sterling will not be making £20m profit for the year. It made £2.97m (net) in 2004, and £2.4m in the first 6 months of 2005. I think £30m will be nearer the mark for 2006, depending on how fast Chinguetti reaches full flow, and it will be making more like £56m per year from the end of 2006 at present rates of exchange...and the price will respond accordingly. I expect the sp to be 30p by April/May 2006, and 50p by April/May 2007.

As for re-investing the profits in the company - that won`t lower the market valuation, which is based on the company`s assets & cash flow. Buying into new prospects (or companies) increases the potential, if not the assets.

Once investors notice the profits increasing (and rapidly) everybody will want a slice of it. A company with a large and regular cash flow is a great investment, providing it is managed in the right way...and the management of Sterling Energy is about as good as it gets.


PS. I see Gordon "The Pirate" Brown has shot himself in the foot again. Shell has cut it`s investment in the North Sea. Needless to say Sterling is nowhere near it...