RE:RE:RE:RE:RE:RE:RE:RE:Interesting quote in today's PRMat1791 wrote: Frank007 wrote: My 2 cents....for what it's worth ....money has already been committed for this well ....once complete the appaisal sets in...smart ...compession of the port project 2023..... feild development or farm in depending on oil prices ...either way Frontera wins .....
worth about,
...2 cents
If well is a bust, FEC may be worth $5-$7, CGX pennies to $1, everyone knows that.
If well goes good, both worth a lot more, everyone knows that.
So, CGX will be house rich but cash poor, balance sheet will look much better, just not liquid. Assets are assets.
And if they find what they think, liquidity won't be an issue, FEC's leverage will be diminished, and partners will come knocking.
I'm a retired Operations Research (OR) Software Engineer, who once aspired to become a Petroleum Engineer, but lost interest after oil prices tanked. I started on a TRS 80 from Radio Shack. (boyjurko - you might be interested in the field of OR, checkout linear programming (LP)).
I hold a little over 70,000 shares of FEC which is a small holding for me (speculation money). This may be a large amount for some of you, a small amount for others, so maybe I'm somewhere in the middle of the pack here. I do think both CGX & FEC have significant upside potential here at fairly low risk which is why I'm in, but will be mostly out before any discovery announcement. I hold 0 shares in CGX.
Mat, I see Frank isn't the only one posting under multiple pseudonyms - you've been a little too transparent - your arrogant attitude totally reminds me of one waitingshill; why don't you both check the name on your underwear, I'm sure it says 'Barney'. At least Frank, doesn't deny posting using multiple ids but I'm sure you will. Sorry to pop your bubble waitingshill/Mat, but Frank is a nice guy - you, not so much. Oh wait..., maybe you're the legitmoron too..., Nah, maybe not.
I think the majority of the readers here, including Frank, understand that CGX has a 32% position in Corentyne and FEC 68% - that isn't rocket science - and he isn't attempting to mislead anyone.
Mat, you claimed to have an interest in both CGX & FEC yet you didn't know the correct outstanding share count for FEC - you don't know what you bought? You never really had an understanding of calculating the intrinsic value of a stock, did you? Your bias towards CGX is glaringly obvious. Mat/waitingshill, In fact it is you who is attempting to mislead the readers. Your convoluted intrinsic value calculation has no real basis and makes no sense. To me it looks like an attempt to obfuscate the true value of CGX & FEC - see below or click Simply Wall St - FEC intrinsic value calculation I'm sure there are many who teach this on youtube;
I do an intrinsic value calculation for all investments that I make, usually combining DCF and P/E (sometimes assets) and it just so happens that Simply Wall St did just such a calculation about a month ago. So here is how they do it - my version is a little different but my number ends up about the same. Coming up with an intrinsic value is admittedly highly subjective: =============================================================================== 10-year free cash flow (FCF) forecast
| | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
| Levered FCF ($, Millions) | US$221.5m | US$85.0m | US$64.2m | US$53.6m | US$47.6m | US$44.1m | US$42.1m | US$41.0m | US$40.4m | US$40.2m |
| Growth Rate Estimate Source | Analyst x2 | Analyst x1 | Est @ -24.45% | Est @ -16.61% | Est @ -11.12% | Est @ -7.27% | Est @ -4.59% | Est @ -2.70% | Est @ -1.38% | Est @ -0.46% |
| Present Value ($, Millions) Discounted @ 11% | US$199 | US$68.9 | US$46.9 | US$35.2 | US$28.2 | US$23.5 | US$20.2 | US$17.7 | US$15.7 | US$14.1 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$470m
After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 1.7%. We discount the terminal cash flows to today's value at a cost of equity of 11%.
Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = US$40m× (1 + 1.7%) ÷ (11%– 1.7%) = US$436m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$436m÷ ( 1 + 11%)10= US$152m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$622m. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of CA$10.40, the company appears around fair value at the time of writing.
===============================================================================
Note: the above intrinsic value calculation does not give Guyana any value. The port, for the time being, is a fantasy and should have no part in the calculaton. Guyana is a liablility until proven otherwise, that goes for both CGX & FEC. Also, I have no worries about Petro, he has bigger problems than polution in Columbia. Petro will be gone in 4 years. Furthermore, if FEC wasn't in Guyana, the share price would likely be near $20 with a nice dividend (Guyana has been a black hole up 'till now).
Mat's opinion: If well is a bust, FEC may be worth $5-$7, CGX pennies to $1, everyone knows that.
My opinion: FEC will still be worth at least $10.00 although it may trade under that temporarily and upwards once a dividend is reinstated.
Hi waitingshill, how's it hangin'?