TSXV:ART.H - Post by User
Comment by
Baxter4on Mar 16, 2010 3:45pm
203 Views
Post# 16889350
RE: 2009 M&A Review
RE: 2009 M&A Reviewgrodt
That report has to be in error. It states 2P reserves are worth $14.40/bbl while good40 is certain it is worth $4/bbl. We all know goofy knows more than all the experts in the world so the article has to be wrong.
And in response to Goofy's last post, he is correct that the potential reserves report is a volumetric estimate which says "If you drill here and find oil, this is the amount that would be trapped. If you don't find oil, then this is the amount of useless porosity you will have in that formation." Companies drilling into that formation use this information to calculate the potential value of the formation and then apply the risk factor and see if it is still economic. Niko and Vast obviously think it is worth drilling.
BTW, using $14.40 for P2 reserves and 23% recovery, the value of Vast works out to
.63 a share. Hey, isn't that where we were last week? Looks like the market is giving only a 10% risk factor on the P90 estimate, or is it a 20% risk factor on the P50 estimate.
Whichever, those who studied the sale of P2 reserves worldwide should have checked with Goofy first before publishing.