Low Expectations
South Africa has no oil or just 25 million boe found... The most over-used words by the Lundin Group regarding explorations are "World Class" and "High Impact"...The old happy days are long gone, and most of their stocks are down 90%. The lemmings that followed their stocks are now stuck like squealing pigs...AFE hold 4.9% of this S.A. play that they had bought in for $16 million plus drilling costs. Let's just presume, they got real lucky & hit the max. 500 million barrels - 4.9% is roughly 25 million rounded. After pipe line & production costs - presumably many years away - an oil barrel will likely end up net around $6.00 to AFE, or $150 million reserve valuation. That would be about $0.22/share based on 683 million o/s shares. The share price will not go much from here but for a small pop on market exuberance...Should it go bust, I see AFE sinking to $0.05...Case in point: Look at Lundin's SNM with 25% (buying more %interest) on the Atrush field that is now producing 30,000 boe per day, the stock is still trading at a horrible $0.10. Why? Cause they had to borrow $250 million to fund the field (plus more investment topping up) and with the stock cap. > 2 billion shares. Just a rhetoric question: Lukas has properties everywhere, private jet and big yacht, but where are the shareholders' yachts??? AFE has a chequered history in HORN Petroleum which went as high as $2.00 on the tail coat of the days-of-yore failed AOI story in Kenya. As for AOI, its stock price has been held up by their massive $370 million cash hoard for on a 25% carried interest in some discarded Petrobras owned properties in Africa for US$1.4 Billion..