RE: What i do not understandI am not sure how you came to that calculation, 4 x sp is not really a viable measure of a companies value. Usually oil companies trade 4 to 5 times free cf and Jr's often 3-4.
Now I think IAE deserves at least 4. If you take guidance for 2013 it's 23k boepd at let's take $45 free cf per barrel (and 330 days) = $ 342/250= $ 1.40/s is CAD 1.47 x 4 is Cad 5,89. Still good upside and 5x 1.47 brings you to CAD 7.35 which is close to your price.
However current 2010 AND 2011 guidance is about 6.4 k boepd = CAD 100 free cf on 250 mln shares is CAD 0.40/s times 4 is around CAD 1.60. Current share price therfeore is around fair value. You can definitely argue 5x multiplier (with fully cashed up Jr. & all development) and that would put you around $ 2 target. I am not expecting a multiple of sp any soon based solely on current production.
Upside will come from accretive deals funded by cash & cash flow. As long as they keep adding production with that they can buy and still use (incr.) cashflow to fund their developments. These guys are ahead of the curve now.
Cheers,
R.