oilking6 re .13 per shareoilking6,
you stated:"sorry if the drilling rig comitments are completely eliminated shareholders get .13 per share? I'm not going to ask where you pulled that number out from. If you read the RBC article you'd notice the lowest number shareholders received was 40 pence per share = .72 cdn....have no idea what you're talking about. Also, keep in mind that .72 number was done on a risk basis....e.g. considering the risk of none of the rig contracts can be eliminated. we now know that one contract has already been eliminated"
I apologize, as I did make a couple of mistakes in my original post on this topic. The mistakes, in my view, are relatively minor, and do not affect the gist of my original post. I will repost my original message with the necessary corrections later. The two mistakes are explained in the next paragraph.
The .13 number was in pence and should have been converted into cents. The amount in cents would be $.23. If you look for the 13pence number in the RBC Capital Markets report you will not find it because the report does not specifically mention it. However, that is the number one arrives at (give or take a pence or two) after carefully interpreting (i.e., drawing lines, etc.) the two graphs that are contained in the report. The first graph is entitled "Valuations under a range of oil price assumptions (12.5% discount rate)" and the second one is entitled "Possible cash to Oilexco shareholders after loan repayments and payments to creditors". Unfortunately, these graphs are not found in the copy of the report that has been posted several times on this board. I tried to copy and paste the report, including the two graphs, on this board yesterday but it did not work. The second mistake has to do with the $55/bbl number I used in my original post. After looking at the graphs carefully again, it is possible that the asset sale price at which the $.23 scenario would materialize is $50/bbl instead of $55/bbl. I use the word "possible" here because the graphs are not entirely clear on this point. At a minimum, my interpretation of the graphs do suggest the following:
(1) If the assets of ONSL were sold at a price of $50/bbl or less, even if all the rig commitments were totally eliminated, the shareholders would likely receive no more than $.23/share, and possibly much less;
(2) If the assets of ONSL were sold at a price of $60/bbl, but none of the rig commitments were eliminated, the shareholders would likely receive no more than $.45/share, and possibly much less.