TSXV:ART.H - Post by User
Comment by
Baxter4on Oct 13, 2010 10:38am
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Post# 17558129
RE: RE: RE: RE:Good 4 nought number's suit his pur
RE: RE: RE: RE:Good 4 nought number's suit his purI've corrected good40's calculations to use actual values. The value of worldwide mergers and acquisitions in 2009 was $14.40/BOE for reserves appraised to the 2P category. This price includes lower value natural gas but is the best value available. Per the potential reserves report, recovery factors vary between 17% and 30%, depending on the formation. I'll concede future dilution so I kept the 350 million shares.
So for each 1 billion bbls OOIP, the share value for Vast can be $4.57 using a 30% recovery factor or $2.59 using a 17% recovery factor.
Remember, the initial resource estimate gave a P10 OOIP of 4.896 billion bbls. This is the high end and if everything goes perfect (which is unlikely), the upper limit for Vast works out to $22/share. I'll be really happy just with the $4.57 though.
Undeveloped oil in the ground is worth $14.40 per barrel... only if appraised to the 2P category. This requires capital expense which is not included with only 250 million shares. You've got to at least use 350 million, don't you think ?
(1 billion bbls OOIP) x (.37 working interest) x ( .3 recovery factor) or roughly 111 million bbls.
111 million bbls x $14.4 equals $1.598 Billion.... then divide by 350 million shares or roughly $4.57 per share.
The value we currently are trading at... meaning it already includes a significant discovery of 153 million bbls OOIP.