The neo mathI'm not smart like you are, Jedd, so I need somebody to tell me where I have made my mistake. As I understand it, the IFR supporters are full of glee because PRD has to pay a 1% royalty to IFR, of their share of the D-57 annual revenues. Isn't that 1% royalty, however, chump change compared to PRD's massive increase in its share of D-57 [12.5%, compared to IFR's 7.5%]? I mean, really, you could take IFR's share of D-57, increase it by 60% and still not have as much share as PRD. Here's my math:
Let's assume that a 1% share of D-57 ultimately translates to $5 million worth of annual revenues [assume any figure you want to, the point remains the same].
IFR's 7.5% share would give it annual revenues of $37.5 million
PRD's 12.5% share would give it annual revenues of $62.5 million
PRD's 1% royalty to IFR would be $625,000
PRD would net out at $61,875,000
IFR would net out at $38,125,000
I realize the value in IFR's diversified holdings, which is one of the reasons I am also an IFR shareholder. But if we are simply looking at the NWT plays, doesn't PRD's hugely superior position on D-57 make it quite irrelevant to be going on about 1% royalty they will pay to IFR?
I need your wisdom quick - or that of the soothsayers - I am thinking that those who understand this are going to be buying heavily into PRD over the next few days. I think the "gap" is about to disappear. I want to buy more PRD before that, unless you can tell me where I have erred.
Neo