$1.20, page-21

Anyone remember this post from two years ago??
Tradey's and i wonder how it may compare to what gets found this time around?
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As you say...60bcf = $1.20 for the share price while it is still a relatively unknown equation....but closer to say $1.80 when confirmed and in production?

Of course any fine-tuning of the share price here will depend on flow rates and pressures.

So in production, assuming pressures are good and flow rates healthy, the above figure ($1.80) gives us 3c value per bcf, or in other words, 3c for every $8m+ of income potential (based on $8/mcf).

Income of $8m = 4c per share fully diluted...so I think assigning 3c value for every 4c of potential income is not exactly over doing it for gas?

But of course we don't know anything concrete just yet, so the market is rightfully discounting the potential 3c/bcf to that of a lesser confidence level. A 33% "risked" adjustment would see 2c/bcf...which is sort of where we are now.

So in effect, we have 2c/bcf based on supposition...and potentially 3c/bcf based on confirmation and production.

On this basis...

50bcf = $1.00 / $1.50
100bcf = $2.00 / $3.00
150bcf = $3.00 / $4.50
200bcf = $4.00 / $6.00
250bcf = $5.00 / $7.50
300bcf = $6.00 / $9.00
350bcf = $7.00 / $10.5
400bcf = $8.00 / $12.00
450bcf = $9.00 / $13.50
500bcf = $10.00 / $15.00
550bcf = $11.00 / $16.50
600bcf = $12.00 / $18.00
650bcf = $13.00 / $19.50
700bcf = $14.00 / $21.00
750bcf = $15.00 / $22.50

Interestingly, these numbers also tie in with the broker reports.

The key now perhaps will be on the ultimate gas in place numbers and of course, flow rates...any hint of a 100bcf find for example, should see $2.00 after the 33% risk adjustment and $3 once confimed and in production?

The short lead times will also have a significant impact on the value model here in my view.