RE:RE:CGX VALUATION
Ermosp wrote: Thanks as always oil run. Can you drill a little deeper on where the $7/barrel comes from? It looks like it accounts for production costs, deduction to hand over operatorship to a major, possibly this increased royalties Guyana now wants.
Oil_run is using the high end of what oil is valued at in the ground. I think $5 is a better number, but we all have our own.
One thing to remember, the price of oil is absolutely irrelevant when evaluating CGX. They are not an oil producer, they are an exploration company. It will take 5 years for this find to start pumping oil (assuming it is commercial). Nobody knows what the price of oil will be 5 years from now. It could be $20, or $200.
The value what they have now is $3 - $7 per barrel recoverable in the ground.
Taking a stab at Oil_runs question of what is CGX worth, I think the find will be closer to 200mbl @ $5 at 66%... value is $666,000,000 or about $2 per share of tangible assets.
Can't wait to see what the actual estimate will be once the report comes out in a few weeks.