GREY:ROAOF - Post by User
Comment by
tanoon Jan 08, 2009 10:24pm
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Post# 15692912
yikes stink bid example $55/bbl maybe
yikes stink bid example $55/bbl maybeyikes,
You stated: "So, can you tell me what would be an example of a stink bid?".
Excellent question. I have been trying to find the answer to that question myself. More specifically, I have been trying to determine the price per bbl buyers have paid in the most recent deals for assets similar in quality to those owned by Oilexco.
The RBC Capital Markets report seems to sugests that if the bids for ONSL's assets are below $55/bbl, then current OIL shareholders will get nothing (i.e, there will be no money left after having paid ONSL debts and liabilities), unless all drilling rig commitments totalling $470M are completely eliminated (I wonder how likely that is), in which case, shareholders would receive around $.13 per share.
Based on the RBC analyst's opinion, I would say that from the perspective of shareholders, a stink bid would be anything under $55 per bbl as this would likely leave them with nothing. However, from an industry perspective, I think a stink bid could mean something considerably lower than %55/bbl, since in his various valuation scenarios, the RBC analyst used prices as low as $30/bbl.