A small blurb from Malcolm Shaws Hydra Capital Blog published today Feb 24th on AOI.
Some quick thoughts today on what comes to mind: The story-of-the-day prize goes to Africa Oil (AOI.TO, last at $2.68) as Upstream Online published a story of a (technically unconfirmed) massive oil find at the Venus-1 exploration well in offshore Namibia. A lot of hyperbole was used in the article with regards to the scale of the “discovery” (again, unconfirmed) and I like hyperbole when it involves something that I own. AOI owns 30.9% of privately-owned Impact Oil and Gas, and Impact owns 20% of the offshore Namibia discovery in question. The other partners are Total, Qatar Energy, and Namcor (the Namibian NOC). If confirmed, this could be a highly material discovery and Impact’s 20% interest would be worth a tidy sum to AOI. Before this news hit, I felt that AOI was worth something close to $3/share with a fair degree of comfort. If you want to guess that a world-class offshore oil find is worth US$10 billion, Impact’s piece would be worth some US$2B, which would be ~CDN$750 million net to AOI. That’s about $1.50 per share. Add it to the $3 that I thought AOI was worth before, and I see a $4-handle coming to a theatre near me if this discovery is for real. At that level, I still think I’m getting Kenya for free and the rest of AOI’s exploreco holdings for free. Good times. I love seeing a big discovery, so here’s hoping it’s officially confirmed as “huge” in the coming days/weeks.