GREY:RNSFF - Post by User
Post by
derpaon Apr 07, 2021 10:29am
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Post# 32948752
Buynig ROE @ 0.11 is like buying RECO @ 0.73
Buynig ROE @ 0.11 is like buying RECO @ 0.73If there is no oil in the Kavango Basin ROE's downside is (I would say) limitted to 7 cents. That would value it at one year's revenue. RECO's downside is huge. If there no oil I would think it trades at 25 cents. Hence the market is giving RECO around $3 premium for the possibility of oil in the Kavango. ROE has twice the shares of RECO and 1/6 the acreage (although on a deeper portion of the basin and with less royalties). So ROE's interest on a per share basis is 1/12 th of that of RECO. It currently trades at 11 cents so the 4 cents premium is equivalent to RECO having a 48 cent premium (4 x 12) to its break-up value. So it is like buying RECO at 73 cents.