Groundstar Resources Ltd GRDSF

RE: RE: RE: What Guyana is worth to GSA...

[CalifDreaming]

Your calcs are flawed in many ways.

First off, assuming success on all their "potential" resources is going to leave you very disappointed.  Read the GCA report for Sagres on SEDAR - only Karanambo is relatively low risk.  

Secondly, "in the ground value" of $20 bbl is very dubious in a place with no infrastructure and little, if any, history of opex etc.  Cut that in half (or more) for a realistic value.  Colombian plays get $20-$25 due to superior fiscal terms, excellent infrastructure and prolific wells with high success rates. Most other plays see lower values.  Compare to prolific Ven plays that only see $1-$5 bbl due to political risks.

FYI, EV/flowing boed valuations are closer to $50K. But if you're in a hot play, that can range as high as $150K per flowing boed.  They can also range as low as $20K for low value nat gas production.  $50K is reasonable, but is far and away the least reliable valuation metric to use.

That said, GSA is good value based on realistic risked value of Guyana alone.   All else is a "free option" on success and I consider GSA one of the tastiest specs I've seen in years.

I suggest Kurdistan offers legitimate 10 bagger potential for a 1B bbl discovery.  6% is 60MM bbls net to GSA. Use $10 bbl and that's $600MM (~$8) upside.  Almost any commercial discovery will offer significant upside (as in multiples).

Egypt offers a chance at perhaps a 100MM bbl gross discovery. 10% is 10MM bbls @ $10 = $100MM = $1.30 upside.

Guyana offers upside somewhere in between the two.

Add them up and GSA exposes you to over $10 share upside in the next 3 months.  A fantastic risk-reward...