RE:White, most of the time book value is not that relevant.
"most of the time book value is not that relevant"
I know, it's exactly what i said in my post.
Often company will trade over their net assets. It all depends on what your assets are bringing in term of Cash flow.
If i buy an assets for 1 MM$ (like a bid on a block). I began to drill let's say it cost 10 MM$ which gets capitalised in the assets and then i found an extremely important oil field and began to generate 10 MM$ of cash flow every year. In my books, I won't be able to capitalised more than Cost. So in the book, you're going to have 11 MM$ capitalised, but then, is an assets generating 10 MM$ of CF really worth 11 MM$ ? doesn't make any sense to me.
We have exactly that with PTA. They have around 110 MM$ in net assets, which only respresent their cost and have no direct link with the potential CF that those assets will generate...