Reasonable expectations Expectations have been way too high. If you assume 16,000 bbls per day which discounts their growth then the shares are trading just under $47,000 per flowing bbl. I have a few. Vermillion energy for what it is worth just puchased some assets onshore in France for $48,000 per flowing bbl and around $15 per bbl for reserves. Some deals in North Sea have been higher at $75000 range but using 16,000 is future production not the 10,000 bbl/d expected now. I am not saying someone won't pay above $3.00 per share. You just have to realize some buyers may only be willing to pay $2.72 which is inline with Vermillion's metrics. Don't start mentioning cash on hand and tax pools .... it is all in the asset value number of $15-$17 per bbl of reserves (P2).
Why would someone pay full value on a takeover. They need some upside so they would more often than not discount the probable reserves and not apply the same value to them as proven reserves. I think the max upside is $3.30 per share and possibly lower in the minds of most bidders. The trouble is that the shares trading at the $3.00 level so long makes management look foolish if they entertain anything below $3.30. Numbers like $4.00 must be backed up by some sort of calculation and if it is reasonable then I will change my mind.