evolution of africa oil corp... mark ii, page-10

Hi Crows and all,

Probably a little premature but I don’t consider the price of Oil will be near $100 per barrel in 18 month to 5 years. And, I also considered the ability to get our money back (from the PSC) for all costs since exploration start, from 60% of production.

I am not trying to value SWE exactly at this stage, makes no sense to.
What I am looking at is its grossly undervalued state at 30m$$ MC AT THIS TIME.

If we take a closer, to real time look…

In Ground Reserve estimate value of ONLY $1.00 (yes ONLY ONE DOLLAR) or (.9 of 1% of markets rates)

Kenya 12B = 1.2 to 2.2 billion barrels

Use lower of 1.2 billion barrels for now.
SWE’s share 50%
Kenya Government (after costs recovery) 35% say
1.2 billion x $1.00 = 1.2 billion dollars
- $420,000,000 (Kenya Government)
= $780,000,000 (remains)
50% (Tullow/Swala)
= $390,000,000 each. ($390 Million)
At today’s shares on issue (~150 million) = $2.60 per share

Be flexible and work on Swala doubling the shares on issue (~300 million shares)
= $1.30 per share IN GROUND VALUE AND ONLY FOR 12B…..and ONLY USING $1

Now use $2 in ground value, ($2.60 per share at 300m shares on issue, and Zero value for the rest)
The $5 in ground value, ($6.50 per share with 300m shares on issue, and Zero value for the rest)

It values at ZERO the following….(with same Geology as the recent Lokichar Discoveries, and immensely derisked):

Tanzania Pagani
Tanzania K-K
Tanzania Eyasi-Wembere (8 x basin sizes of Lokichar discoveries)
The next few months, with progressive 2D reporting and interpretations will be interesting to say the least.

Now add some value for all the ZERO valued assets – Even if they collectively ONLY doubled the 12B potential……..(which would be an ample risk discount) – WOW!!

The market will surely awaken to the possibilities of Swala soon.
(Africa Oil has 253 million shares on issue, and has seen highs of C$10.80, presently trading at C$7.68)

Then we still have the possibility of:
Zambia Bloc 31 (if awarded)
Zambia Block 42 (if awarded)
Zambia Block 44 (if awarded)

I continue to support TheDhons view that Swala will rerate as did Africa Oil. The similarities are just TO SIMILAR to be dismissed.

I won’t at all be surprised when the market makes this happen…..but may well be pleasently surprised where it takes us.

Again, this is for my own mind-games. I am just looking at the inherent undervalued prognosis of Swala.

Always, ALWAYS DYOR!!
Right or wrong....this is only my thinking explained, nothing more.

Heres to a good week.