LFD VALUES INSIDEThree Ways of Valuing LFD:
Option 1 (Asset Value)
132 million barrels of oil *$ 90 per barrel * 40% - 40% royalty = $ 2 billion asset value.
$ 2 billion asset value / 150 million shares = $ 13 per share (asset value)
Option 2 (Buyout Value)
Per recent buyout $ 60 million was paid for well producing 700 barrels per day.
LFD has 5,000 barrels per day giving value of $ 420 million
$ 420 million / 150 million shares = $ 2.80 per share (BUYOUT VALUE)
Option 3 (Revenue Value)
5000 barrels per day of oil per day * 40% * 365 days * $ 90 per barrel = $ 67 million in revenue
$ 67 million in revenue minus 40% royalty = net pay of $ 40 million
$ 40 million / 150 million shares = Earnings of 26 cents per share
26 cents per share earnings * 30 times = $ 7.80 per share
CONCLUSION:
No matter how you cut it, LFD is way undervalued just with 5,000 barrels of oil per day.