Ithaca Energy Why it's Going to GO HigherIthaca Energy:
Facts Are..There are however many NAV calculations where you can just see they are flawed despite the fact that they are made by reserve auditors (especially with fields at the higher end of the cost curve).
And the reason why Valiant was so cheap was because they were spending all the free cash flow from their assets (and some more) into drilling dry holes. You can see from Ithaca's current cash-flow and margins that the assets they have acquired from Valiant were actually better than the assets they had, even before synergy gains. Therefore it was logical for them to take it over and divest the dry-hole practice while keeping the cash generating assets.
And indeed, sometimes company's that trade below book trade there because they are destroying shareholder value by spending more than they get back. But sometimes, it is because the market just doesn't like them, like many would argue about INA right now. Same goes for Ithaca.
The market is just not efficient plenty of times.
But you still haven't explained what was wrong with what I had posted about Sterling, the reason you attacked me then. You make it appear as though I only focus on the book value, but that is not true when you saw my post from Sterling.
What I said was that if there is not much nonsense on the balance sheet of that company (the biggest things besides Breagh are tax allowances and Cladhan which appears like a high netback low cost field similar to Orlando) and you can buy a superior asset (which Breagh is compared to many fields in the UKNS with opex of about 10% of revenues) then you don't do bad when you can buy this asset at less then book value because you will have to spend a lot more than they had spend to find and develop a comparable asset right now. That was what I said then.
Thedave on Ithaca Energy Love Iona Energy (INA) also$$$..