RE:Thailand Book Value Continues to DeclineBook value is meaningless with respect to value. Just think through how the accounting works for an O&G company when it is in production rather than development mode as POE Siam is.
Every quarter, depreciation of its energy assets will be booked, thereby reducing the value of equity. The company is spending less on new drilling then depreciation (as opposed to during the development phase), so the net accounting value of its energy assets goes down.
On the other hand, net assets increase by the amount of cash coming into the company but since almost all of that cash is being paid out to Pan Orient and the other 50% owner, cash and current assets stay relatively stable.
In the case of POE Siam, you also have a significant amount of foriegn currency translation to deal with period-to-period as the assets are in Thailand. All in all, book value is meaningless with respect to value.
What you need to follow and what will have a large impact on the the sale price of the Thailand assets is the reserve value of the assets which was described in the January 31 NR. Sproule provided a value of Pan Orient's 50% share of proved and probable reserves (using a 10% discount rate per year) of $54M in CAD. This was a huge increase from the prior year due to higher prices and additional reserves that nearly offset 2021 production. Keep in mind that the price deck used for this calculation (which is based on securities rules, not energy forecasts) was $75 USD brent price for 2022 and lower in subsequent years so the value of the reserves is actually materially higher.
Then, you need to add current cash and deposits at POE plus its share of same at POE Siam and the value of its share at Andora and the total value is significantly higher than the current share price.
Steve