ARD Q4 Expectations
Look for Revenue of $9.9 million and EPS of $0.32.

My projections for Q4 are based on 172,386 BOE produced with an average realized price of $57 to $58 per BOE.

The math looks like this:
172,386 X $57-58 = $9,826,002 to $9,998,388

So we should expect Q4 revenues of between $9.82 and $9.99 million.

I'm expecting a net profit margin of 42-45%. With that we should have net income of between $4.12 to $4.49 million.

(Low figure derived by multiplying low revenue by low net profit margin. High figure derived by multiplying high revenue by high net profit margin.)


Modeling for 13.1 to 13.4 million shares outstanding we should have EPS as follows:
$4.12mm / 13.4mm & $4.49 / 13.1mm = $0.30 to $0.34

(I divide the high net income figure by the low estimated share count. I also divide the low net income figure by the high estimated share count. This will provide the greatest possible window for EPS. Therefore it is highly likely that ARD EPS will fall within this EPS window.)

What to make of ARD's final Q4 results

Simply stated, you should expect ARD results to be as follows:
Realized Price per BOE....$57 to $58
Revenue.......................$9.82 to $9.99 million.
Net Profit Margin.......42 to 45%.
Net Income..............$4.12 to $4.49 million.
EPS........................$0.30 to $0.34
Shares Out............13.1 to 13.4 million

I'm looking for ARD shares to be realatively stable in a tight trading range as long as ARD reports numbers within the ranges above. The wild card for Q4 is realized price per BOE, net profit margin and shares outstanding. If ARD can come in high on realized price per BOE, high on net profit margin and on the low end of shares outstanding it is within the realm of possiblity that ARD could exceed EPS of $0.34.

What could this figure be?
Lets use $58.50 for realized price, 45.5% net profit margin and 13.1 million shares outstanding:
172,386 X $58.50 = $10.08 million Revenue
$10.08 X .455 = $4.58 million Net Income
$4.58mm / 13.1mm = $0.35 EPS.

So in an ABSOLUTE PERFECT WORLD ARD is capable of $0.35. Anything above $0.35 is COMPLETELY UNREALISTIC. If ARD hits $0.35 expect the shares to skyrocket.

So right now we are looking at a realistic revenue window of $9.82 and $9.99 million. I am putting my estimate right in the middle: $9.9 million is what I"m going to expect.

In terms of EPS we are looking at a realistic window of $0.30 to $0.34. I'm going to put my estimate at $0.32

With $9.9 million in revenue and EPS of $0.32 I firmly believe ARD is on track to accomplish many wonderful things not only for the company but also for the shareholders in 2006. My 2006 target is $60 per share.