Arcan Resources Ltd ARNBF

RE: $30 to $70 take out price

[opg210]

Hey prospect,
I like your numbers, one thing though - remember to get those 184 mmboe of fraction thereof, they need to issue 26 million shares, bumping their total up to 80 million. Also, you need to factor in the cost of drilling 200 wells @ 4.5 million a piece. Nevertheless, some attractive numbers still materialize!
I did several runs and backed in to values of >$10/share:
To be conservative, take 90 mmbbls (as you did) @ $30 netback =     $2.7 billion
Less cost to D/C/T 200 well                                                                             0.9 billion
Subtota                                                                                                                 1.8 billion
Take PV10 as 2/3                                                                                                1.2 billion
Value per share  (80 mm shares o/s                                                             $15.38
Last year's NAV                                                                                                      3.77
Estimated NAV                                                                                                   $19.15
OR, a more conservative route:
If you take a $30-35 netback and 5,000 b/d, and 8X to 10X cash flow, you can justify a share price near $10. However, the market often pays for the forward year CF estimate if it's a good growth story.
Enjoy the ride!