Pretty Much a No Brainer Looking at the recent reservers report, while $3.90+ might make us feel nervous because we are near the recent highs, consider the following valuation. I note that it completely ignores gas, which isdefinitely worth something again:
Share value =((Proven + probable oil/NGLs reserves value) + debt + option income) / fully diluted shares
Income when current options are cashed will be $19.7M, and per their latest news RMP had $76.7M of YE12 debt.
Per the latest news release, their average netback is $36.64/barrel. And note that this includes all that low (or maybe even negative netback from the gas production). They are definitely in the $40's with just the oil and NGL production.
Share value = ((11.29M barrels + 1.08Mbarrels) x $36.64/barrel) - $76.7M + $19.7M)/104.1M shares = $3.81/share
So ignoring the rest of all their undrilled lands, both oily and gassy, the shares are only barely above the NPV for the proven + probable oil/NGLs. Kinda reminds you of Deethree, doesn't it?
Hmm, no wonder I bought more today.
GLTA,
Larsen6