My estimate is that SKO’s Q4 EPS will be around $0.06 per share and their Q4 cash flow will be around $0.09 per share based on the following inputs:

Q3 MD&A indicated current daily production net to Stream was 1,600 BOE. This resulted in actual daily production of 1,373 BOE. I deduce that the Q4 will have the benefit of a jet pump or two that will result in daily production between 1,400 – 1,500 BOE per day. Brent pricing for Q4 was 2% higher than what we experienced in Q3.

YE results will thus include annual EPS of $0.22 per share and Cash flow of $0.29 per share. At the current value of $0.75, the P/E ratio will be 3.4 and the price to cash flow will be 2.5 times.

Liquidity has been a concern for the company and I anticipate that we will see an improvement here.  In Q3, SKO’s capital additions were $6 million dollars of which $4.5 million was for “equipment”.  This tells me that the company does not require significant “downhole” capital expenditures to increase production.  This, I suspect that they bought the 6 jet pumps in Q3 and will install in late Q4 2012. This is also alluded to in Bobwins post on November 1st indicated that the six jet pumps were “paid for” In Q4 capital additions for normal operations could be $1-3 million. Cash from operations will be between $4 and 5 million which would be SKO’s 1st quarter where they have positive corporate cash flow.

Everyone on the board (frankthetank, Bobwins, Darcyclaw, etc...) is frustrated with the company’s communication and I am no different. Point “c” of the company workplan in their press release indicates a 2012 goal of internal corporate development and I wonder if they are working to address it.

On the big picture, we have seen SKO’s income increase from $2.6 Million in 2011 to $15 Million (hopefully) in 1 year. I suspect the issues that they had to address were huge. I try not to get hung up on the share price and continue to buy on the dips.

Good luck with your investment on SKO...