If ...... and it is an enormous if .... the proposed structure is as the Airbourne Gravitational survey predicted ..... and there is 160 million barels of Oil in place, then NWE share is 40 million barrels (25%). Then you need to allow for yield and recovery rates of lets say the range is 25% to 50% ... gives us potentially 10 million to 20 million Barrels of Oil. Now the arguement is how much do you value Oil in ground? We are fortunate that we can access the reservoir from on shore. This is a real plus as the initial cost for set up is low as compared to off shore and we have the permit to drill the deviated well already in our pocket once the sweet spot is identified. The consortium are agreed to commercialise the deviated well and to harvest the Oil produced immediately. Harvesting costs should be low. The value of the Oil in ground, in my opinion, is at the upper end of figures so the range, I think, is from $7 per barrel to say $12.50 but if we work on $10 then everyone can adjust the figures according to their own opinion.
That gives us a potential value for the Xanadu field of $100 million to $200 million for NWE. We have 3.382 billion shares on issue so the share price comes in ..... IMHO ..... at 2.95 cents per share for 10 million barrels of Oil and 5.91 cents per share for 20 million barrels of Oil.
Do your own research .... I like others here ..... have owned this share for a LONG time .... so I cannot claim to be any expert.
NWE Price at posting:
0.2¢ Sentiment: Buy Disclosure: Held
