presentation: it's about oil, page-9

This report from Peter Strachan is about 6 weeks old but might help you a bit.

TEXON POWERS AHEAD: Texon (TXN) remains a
buy for the emerging value of its Eagle Ford
and Olmos oil and gas interests in Texas. The
stock has little downside risk and should
continue to perform strongly for several
months. It offers both a trading position as
production rises short term and farm-out
deals are negotiated and also a long term
(12-24 month) buying proposition.
Logging results from Texons latest well, located south of its producing Leighton oilfield
area at the Rockhampton and Mosman project area in McMullen County Texas, recorded
intersections totalling 150 metres of combined Olmos and Eagle Ford Reservoirs. Texon
will complete this latest well for production from the Olmos, after collecting data from the
Eagle Ford and fracture stimulation of the Olmos.

Texon (TXN) remains a buy
for the emerging value of its
Eagle Ford and Olmos oil and
gas interests ...

Page 2
This well should add an initial 400 BOPD to Texons production capability, once it is tied
back to facilities and linked into transport to market. The company calculates that the
combined potential of both its Olmos oilfield and its Eagle Ford shale prospects in both
project areas amounts to a net working interest totalling 42 million barrels of oil
equivalent, to the companys account. StockAnalysis believes that the risks going
forward are low to moderate.
StockAnalysis calculates that gas and oil at Antares Energys nearby Eagle Ford area has
a value of US$2.60 to US$3.20 per Mcfe, which equates to about US$16 per BOE, at the
lower end. On this basis, hydrocarbons within Texons McMullen County permits should
have an NPV of US$670 million. The problem for Texon is that it only has about $5
million of cash, which is insufficient to develop this field on its own, where horizontal
Eagle Ford wells cost about US$5-6 million each to drill and complete and an additional
$20 million may be necessary to establish oil and gas processing and gathering facilities.
Assuming that Texon had to sell say 40% of its permit interests to fund development of the
remaining 60%, this would still leave a value of about $2.80 per share from this interest
alone, prior to allocating value to other exploration and production assets. Alternatively,
Texon could bootstrap itself into production with the help of debt from Australias
Commonwealth Bank, operating out of New York. Deducting say $100 million in value to
account for debt obligations leaves an NPV of $4 per share in the case of total success.
Conservatively, StockAnalysis calculates a risked value of $1.75 per share
for Texons McMullen County interests and upgrades total risk adjusted
target value to $2 per share.
Subscribers are referred to the 17th of March StockAnalysis edition for a recent
update on Texon.