LGX Oil + Gas Inc ROAOF

Always keep thinking yourself

[Resilience]

Macro movements are always more predictable then micro movements (warren buffet).

Thinking Macro:
- RBS is now partly owned by the government
- they have a big interest in stabilizing trust
- they have a big interest in securing North Sea oil production, exploration & entrepeneurship
- OIl has been the flagship of this


Ask yourself, what would you do as government with a big interest in RBS and North sea oil production & exploration. You would influence lending. Encourage the banks to do what they're supposed to do: start lending again.

Now clearly art has fucked up and has to go with part, if not all of the board. pissed off to many ppl. So resell to them (OIL) is unlikely.

Then consider the micro calculations:
- Take good40's 25% of Brent x 63 Mln (conservative reserve) is indeed around 700 mln
- Now take this at 1 year prices from now (around 55) is already around 866 mln
- enterprise values are never estimated at 1 year value but a weighted estimation of future profits - everyone expects oil to rise 9 months from now - as evidenced in the futures and the cotango
- Now consider normal CF multiplicators for producing companies is 5x: Including Shelley at production and current 45 Brent & 26 production cost this brings (30.000x330x19)x5=940 Mln
- Multiplier of 4 brings: 750 Mln
- At 55 future prices with a multiplier of 4 gives 1148 Mln.
- Even at 63 mln 2p 30.000 production gives more then 6 years production

this ecludes any exploration upside. Just current proven 2p & 30.000 production.

Logic dictates that if shelley comes online the shareholders will get money. If not we're fucked.

additionally if 2p comes out higher then 63 Mln. there's aditional upside. again if lower. We're fucked.

I for one will sell some on strength and ride out the rest.

Cheers,

R.