CGX Energy Inc V.OYL

Basic math has to prevail… eventually I hope!

[westcanpride]

Assuming we take the difference of 514 and 628 mmboe prospective resources, we get 571 mmboe. 

Numerous examples of companies paying well above $1/mmmboe for prospective resources when buying a block of land. For simplicity, let's go with $2 usd/mmboe for Maastrichian. 

$2 mmboe x 571 mmboe = $1.142 B usd total 

$1.142 B usd x 1.35 cad/usd conv rate = $1.54 B cad

$1.54 B cad x 27.48% WI = $423.6 M cad

$423.6 M cad / 338 M outstanding shares = $1.25 cad/share. 

End of day, if these losers cannot even get at least $1 cad/share for CGX something is seriously wrong. None of the math above even assumes any value to the port, past tax credits, deeper horizon oil value, etc.

Even for FEC, 72.52% of $1.54B = $1.11B or $12.97 cad/share. 

I have personally seen companies with no money sell their oil resources for great money and make shareholders happy. Northern Corentyne is situated right next to ExxonMobil JV for bloody sake and you have a government also desperate for hydrocarbon production. 

If De Alba can't make this opportunity work, he should be prohibited from ever being allowed to sterlize any other company again in the future. A group of university students could monintize this opportunity better I have no doubt.

[Gtboy]

Good analysis WCP. Makes sense. What I do not understand is what is taking them so long to get an interest from a prospective buyer. The longer this takes the less hope I feel. Since they announced this it has been so so long and nothing. I will try to do some digging and see whats going on Glta

[Frank007]

I will say it again ...it's a slow shake out ...the bankers that finance any of these deals are shaking out the weak hands ...good luck ...buy some at the low each day you will be rewarded handsomely ...

[Rapsani]

This has been the story of CGX sadly.  Your math is sound, however, you are missing a big value add - US $323 million of operating deficit they can use towards reducting royalities when producing.   So 323M x 1.35 exchange rate = CDN $436M. Divide that buy 336M shares - $1.29 Cdn/share In my mind it should your 1.25 + 1.29 = 2.54 cdn / share fair value. Sure is interesting that

[westcanpride]

That's a interesting point you raise at the end... "remain an entity" to see the tax credit.  Can this be confirmed or just an assumption?  Lord knows no sane management team on this planet would ever want to have CGX (or FEC for that matter) as JV partners. 

[Phantomblogger]

Rapsani, "I believe though in our favour is to realize that benefit CGX would still need to remain as an entity." Can you please elaborate on your above statement, especially the part quote, "CGX would still need to remain as an entity". TIA Phantom

[Kingmosabe]

I refuse to believe these clowns are that stupid..Impossible..The silence makes us think the worst, heres to hoping for the best possible outcome..No doubt it will get ugly till the end from here, Im waiting now for OIL NOW to start bashing CGX / FRONTERA...Par for the course..

[Frank007]

Do you know who owns and publishes Oil Now ? ...lol it is trafigra and vital ....lol ...look up who they are and what interest they have in stealing the price of oil ....lol ...look it up !