RE: CGX COMPARATIVE VALUATION V
Comparing CGX with UNX is not fair :
a) Namibia is already de-risked with the discovery by Chevron in 1974 of 1.2 TCF of gas in the Kudu Gas field and more recently of a possible 14TCF of gas in Kunene 1 by Russian Company, Sintez.. In drilling Kunene 1, the drill bit broke at 4300m. It is believed that had they been able to drill deeper, they may have found oil as the latter being heavier than gas is usually below the gas.
b) HRT who bought UNX for $9.17 handled the 3D seismic and interpretation of the data for UNX'S blocks in Namibia and therefore had inside information about the potential of UNX. Chariot whose 8 blocks are less prospective than those held by UNX ( UNX blocks like those of CGX are in the area of the oil kitchen ) have a prospective resource of 23bbloe while at the time HRT bought UNX, the latter had confirmed prospective resources of 6bbloe. When all of the 3D seismic is done for UNX, the prospective resource (and HRT knows this ) is likely to be 65bbloe. THESE FIGURES ARE MIND BOGGLING when compared to those of CGX.
c) UNX had only 150 million shares outstanding as compared to CGX's 350 million.
d) With nearly 12 years of TOING and FROING , CGX is suffering from "investors fatigue" and there is not much excitement as there was in 2007 and earlier. Investors now want to see action and results rather than ("talk, talk, talk")
e) Up to early 2011 CGX was managed by engineers who lacked the managerial skills and entrepreneurial spirit to exploit the opportunities that the company enjoyed in 2007 , shortly after resolution of the Border Dispute.
CGX definitely has excellent prospective resources, but it's management has been a failure. I think that PRE will ensure that the company becomes and remains focused on the end game.