DEC-11-2012: DAVY RESEARCH Looks like Davy Research issued a 'morning equity brief' following Tullow's announcement earlier in the day. The report states:
The decision to step back from the Guyana licence reflects post-well analysis showing that the high temperature nature of the well is likely to have pushed whatever hydrocarbons are in the system into the gas window. Tullow's strategy is to focus on oil not gas, consequently ruling out continued involvement in the Guyana licence. We valued this licence at 13p per share.
Full link: www.davy.ie/content/pubarticles/eqbrief20121211.pdf
So, Tullow has approximately 907.7M shares outstanding. £0.13 * 907M shares outstanding equals roughly £117.91 valuation for a 30% interest in the Georgetown License. Or, £393.03M for a 100% interest in the Georgetown license. Or, approximately $630M evaluation for a 100% interest in the Georgetown License; or $6.28M for a 1% interest in Georgetown License.
So....according to this valuation from Davy - this would mean CGX's 25% interest in Georgetown is valued at $157M. Or, $0.34 per CGX share (assume 465M CGX shares out. on a fully dillutive basis). Note, this valuation does not include Corentyne, Annex, or Pomeroon - all of which CGX owns has 100% interest in.
Am I missing something here?
Also, I believe the Georgetown license expired at the end of November 2012. So, it would seem all partners (Repsol, CGX, Tullow, and YPF) have intentionally let the Georgetown license expire. For what reason - we do not know at this time. However, we have heard from both Repsol and Tullow (after Jaguar-1 was abandoned) and they reiterated their committment. Moreover, they also expressed their enthusiasm with recovering oil from 2 fans above the primary target.
Look forward to getting past this period of 'uncertainty' and having some sort of firm drilling schedule outlined from the partners. Of course, would like to load up a little at these prices and take advantage of the weakness.