Macro Tsimmis

intelligently hedged investment

Transmeridian (TMY) update #3

Posted by intelledgement on Fri, 11 May 07

Transmeridian (TMY) announced their 1Q07 results yesterday after the close of the market and there was no joy in Mudville. Average daily production for the quarter was a record 3500 bpd of oil but expenses rose even faster and while the production numbers approached what management had targeted as their breakeven threshold of 4000 bpd, the red ink surged year-over-year from $12.7MM in 1Q06 to $15.5MM this year. And while the volume of sales were up, the average price per barrel actually declined from $30.05 in 1Q06 to $28.19 in 1Q07.

This investment is not looking good but the spec port overall is doing well enough here that we can afford to cut TMY management some slack given the still huge potential upside if they can get their production issues solved. Let’s see how the second quarter goes.

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