RE:RE:Altai conservative unrisked NAV of over $5.00!!! Mackie 2011Whats not to trust Rarihokwats? Unrisked means that - assuming 100% likelihood for exploitation, the value of the undeveloped land (X acres) based on a resource assesment, net of debt and add cash and other asets, is Y. There are 100s of assumptions going into it.
Given the history of oil&gas in Quebec, its not strange that the market discounts a low probability for exploitation of the land, political uncertainty is lethal for company valuations. Yet that is what makes Altai such a great opportunity for investors like us, before more capital finds its way into these plays. Buying the stock - you are making a bet that exploitation will happen, every cent it goes up means that the market prices in a higher and higher probability. So if the market would start to believe and therefor price-in tomorrow morning that there is a 50% probability that 25% of the land will be expolited, that is 45ish thousand acres X CAD 5000 ( descent assumption) X 50% probability = CAD 112,5m + cash = CAD 117,5m /55m shares = CAD 2,13/share. Thats an EXAMPLE. You can run NPV analysis per well and adjust that with probability factor, given the likely great economics. Or whatever.
So you can play around with assumptions however you want, in any case it should be concluded, with the draft regs on the table, that Altai's 180k acres should be valued more than current CAD 11m which is what a nice apartment in central Montreal goes for, ie 66 bucks per acre when QEC trades at 500 (havent calc it lately but also cheap) and Marcellus/Uthica producers trade at USD 8000++++.