50mill is too high EPS imo. When you consider tax, depreciation, interest, etc etc, it'll be more like $40m.
I generally adopt a worst case scenario of 50% of revenues for NPAT, which is then used for EPS. What tax/royalties are they paying?
Also how many shares are on issue? Say 400m shares, then 40m NPAT divided by 400m shares = $0.10 EPS. On a P/E of 10, thats a SP of $1.
If oil prices stay high, there are no production problems, and production doesnt start to plateau quickly, then this will be a profitable venture for the company. NDO is probably worth $1.50+ purely based on Galoc. Depending on the other assets, you could add maybe another 50c to $1 on the SP, giving us an estimated SP of $2 minimum.
I don't hold, but looking at it carefully. 5 bagger opportunity.
NDO Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Not Held
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