RE:RE:Valuation Hi Ground Pounder .. Geez, you know, you're right .. Blame it on the coffee as I was writing that or my iPad almost running out of juice .. Or that I'm not a mathematician .. But you're right.
To review my numbers:
"Based on the above, the assets had a market value in 2011 of $29,000,000. With four times the cash flow and increased net backs and gas prices the company should be worth at least four times today.
Based on the preconsolidation price, $0.13 should today be $0.13 X 4 = 0.52. In post consolidation numbers (25:1) that is $3.25 X 4 = $2.08/share. That's today, before any development wells are completed, before any announcement of drilling offshore wells is announced .. "
Based on the value of the assets being at least 4 times what they were in 2011 (Based on increased commodity pricing, throughput and price contracts at the gas processing plant as noted above in my earlier post) the value of the assets today on a per share basis should be in preconsolidation numbers $0.52/share.
The shares were rolled back 25:1 and therefor you should multiply that $0.52 by 25.
$0.52 X 25 = $13.00/share. Or, $3.25 X 4 = $13.00. You are exactly right. It's just remarkable.
Thank you very much indeed for your correction Groundpounder.
Onto you other question about Total etal's $1.3 billion dollar proposed exploration/development program near our gas processing facility.
Firstly, to answer your question as to where we would get the $50 -$100 million dollars to expand the ArPetrol plant. In talking to the President Ian Habke, he mentioned that debt financing in Argentina for oil and gas exploration and development was a bit of a non-starter. He did however go on to say that the banks seem ed receptive to debt financing for the expansion of gas processing facilities, and I would add, particularly if you had a signed contract with Total etal that they were going to put their gas through your plant.
Your second question about why I thought Total etal wouldn't just go and build their own plant .. Well, I suppose they could, but if Argentina is anything like Canada with regard to getting permits and rihtaways and all the rest, never mind some unforeseen environmental uprising not wanting any more infrastructure built, it would be far easier for Total etal to process through our expanded plant than try and go though all the rigor of trying to build their own. They might even finance the expansion on some sort of favourable terms for the ability to go through the ArPetrol plant.
If Total etal decided to try and go it alone, again, I can't imagine the Argentinians favouring that decision,then fine, ArPetrol has enough gas in its offshore field to feed the plant for (I beleive I read) 20 years.
It's interesting that it is Total that is the lead in this offshore exploration and development in Argentina. Both Claudio Ghersinich and Jeff Boyce were founders f Vermillion Energy Trust and their first big deal was an acquisition in the Paris basin in France. Total is a French company. You have to think those guys know each other and can work out a deal favourable to ArPetol and Total. Again, and other perfect piece to the perfect picture.
Thanks again Groundpounder for the correction and the questions. This thing just keeps getting better.
Doc.