I have spent considerable time valuing MEO and to be completely honest, I didnt like the answers I got mainly because they did not reflect the sort of value I see... The valuations are flawed in many ways I will quickly touch on a few...
,for example valuations are cost based, discounted... as MEO will likely be free carried on drilling its costs on its market cap in the likelihood of failure are not represented accurately in these models..... the other problem with these analyst reports is they do not accurately report risks... drilling risks are only the first wave of risks to production... ifI remember Artemis is around 34% COS... minus development stage, production stage risk off that... ... Ive seen MEO analyst reports that dont even discount... ...
I know about finance prat, I am qualified... but I have chosen to follow my dream instead of going down that path... and yes... the value of an investment is the presnent value of future cashflows...
the only problem in that is, no future cashflows exist... only the imaginery ones in these analysts heads...
prudent management would have these analysts steer well clear of valuations...
but they dont? why not?
because this is complex and when money is involved people will do anything... Just look at New Zealand and see how we have done... our so called finance leaders, and fund managers have destroyed any reputation we ever had... and they did it for the sake of money... WAKE UP PEOPLE>>>
This investment seriously has little to do with these valuation reports... It is more to do with the immense risks that shareholders face going forward... without the right partner, MEO will be stuffed with a discovery and will have to rely on its JV partners...
.^sc
MEO Price at posting:
38.5¢ Sentiment: None Disclosure: Not Held
