GREY:ARHTQ - Post by User
Comment by
eventtraderon Feb 25, 2010 12:08pm
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Post# 16819655
RE: RE: good40 the fraudster
RE: RE: good40 the fraudsterG40,If you you are going to post numbers as fact, please post your underlying assumptions. Thank you.
We agreed a few days ago that VST's net participating interest is 4.5%. Assuming recovery factor of 16.5%, shares outstanding of 270m and conservative US$50/bbl selling price -- i get implied production of 84m barrels and 509m barrels OOIP based on a C
.70 share price. This is 1/3 the valuation you continue to post on without posting your assumptions.
I disagree with you about the dilution risk. Why don't you refer to the money VST will raise from their warrants instead of assuming that that shares in issue will jump from 270m to 500m? In previous posts you say 400m -- so what is it your assumption? Is it 400 or 500? If a 2nd well costs US$37m and VST has to pay 1/2, then they need to pay US$19m. At current share prices, that means AT MOST -- they have to issue 27m shares. How on earth do you get from 270m shares to 500? Do you really expect the share price to fall to 0.08 in a secondary placement. Worst case scenario -- there is a dry hole -- do you really believe that the best valuation they can get for a 37% working interest in a block that size is 8 cents after NKO paid the equivalent of $1 cash/sh for their additional 10% stake? I think your dilution assumption is way off -- worst case scenario by a factor of 9 times (27m vs 230m).
It's great to have a devil's advocate on the board -- but please post your assumptions!
Thank you..