RE:RE:RE:RE:RE:RE:1 Billion Dollar Production Hub
Doug, remember only 540MIl of that $1Bil can be attributed to IAE (they Own 54% of it, or is it split 50/50 with Dyas? Regardless, let's say ($540mil plus another say tax pools of $1.6Bil X say 35% = $560Mil. Plus whatever say 22,500 flowing bopd are worth and 57Mil in reserves) minus about $600mil in debt and divide that by the number of diluted shares and you've got a share price that is in the ball park. So the questio is, what are 25,000oepd flowing worth and what are 57mil barrels worth? My guess is that the company pre-adjustment for debt is worth somewhere around $2Bil minus $600Mil in debt leaves us $1.4Bil divided by say 450Mil shares puts a fair price of around $3.11. So to get to a $3.00 takeout price, assuming a 35% premium we would need a share price of $2.30. So, my thinking is that once the price of oil rises high enough to bid the sahre price of IAE up to the $2.30 range, we will be taken out by Delek. So the question now is, what price of oil warrants a $2.30 share price when IAE is producins say 22,500 oepd? $60?
At $60 we would be netting $40 per and at 22,500 for a year we are netting $328.5Mil per year. Divide this by the total diluted shares of 450MIl we get a cashflow per share ratio of .84 at say a 3X multiple and we have our 2.30 (and change). So my thinking is that if the PoO can get to around $60 by Christmas then we will get taken out by Delek becasue then everybody can justify the purchase. The BOD is happy, the institutions are happyish and Delek can sell the 35% premium to their BOD.