Where we are going..Using MVN as proxyRPT is currently in the early stages of emerging from being an orphan stock.
Orphan stocks are very much undervalued relative to asset and earnings profiles.
MNV which also operates in Argentina provides a nice proxy for where we are going.
With its new acquisition, MVN will have the following valuation indices....
...550 million shares
...$275 million market cap
....11.1 million boe of 2P reserves
....production of 4900 boe/day
These would rate its 2P reserves
......at about $25,000 per boe
.....Its valuation per flowing boe of $55,000
...Its 2P reserves at 20.6 boe per per 1000 shares
...Its production at 9.1 boe per 1000 shares
RPT has 2P reserves at 300 boe per 1000 shares
RPT has production of 10 boe per 1000 shares
RPTs current production would be valued at $12 million
RPTs current 2P reserves would be valued at $170 million
MVN current market cap is 7 times forecast annual cash flows, including the current acquisition.
MVN is 70 % oil which would account for a higher valuation per unit.
However, its forcast netbacks are below average, and its RLI is below norm.
RPT has a cash cow in its gas processing plant that will offset a significant amount of any oil versus gas bias.
At 7 times annual cash flows, the gas plant alone would be valued at $38.5 million US.
With a current market cap of just $10 million, we have no where to go but up
Once we get the signal that production growth and reserve development has begun, look for a large jump in the share price.
Operating earnings from the gas plant alone values us above $1.50 per share///