reserves, page-31

trader,

I was referring to your qu:"Not sure why people here are baffled by the SP..."

Certainly not blaming the lack luster performance on the Olmos sale.

As I've posted a couple of times - personally I believe that the company's communications play a large part in that. I think they desperately need someone to run investor relations ... or more logically replace the current corporate secretary with someone willing to do both roles. A prime example currenly in play is that TXN is to be included in the ASX300 this week and I'd give odds of 10:1 that no one from the company has been running presentations to the instos.

My continual point has been simply that it seems to me there is a significant disjoint between the MC and the value of the assets.

TXN's major assets are 7,200 acres of prime EFS land + 4 producing wells with EURs approaching 600,000 boe + $25m odd in the bank + no drilling commitments until the end of the year = no cap raising required and a pure focus on the sale. So the major catalyst is - what is the EFS going to sell for?

Yes - you are absolutely right. RBS were way off the mark with their Olmos valuation - so does that mean they're way off the mark for the EFS value? I'll do my own back of the envelope calc then.

My guestimates are:
4 x 80ac producing wells - each with a $9m horizontal multi stage fracc'd well on it and EUR's of about 600,000 boe. Lets be conservative and value them at $10m each. So there is $40m for 320 acres.

Of the remaining 6,880 odd acres approximately 60% either directly adjoin either these wells or are bordered by neighbouring producing wells (eg Swift) - but in order to be conservative I'll ignore this for a moment and adopt the current market price of $24,000/acre. 6,880 x $24,000 = $165m

Add the $40m for the wells + the $25m in cash and you get assets conservatively worth about $230m depending on what happens with tax but I've also left out all the other assets to approximately net it out.

$230m/245m shares = $0.94 per share approx asset backing vs $0.63 current SP - that's where the confusion comes from.

As to whether the MD has earned his money yet? I imagine he's currently shopping that EFS acerage around like a turkish carpet seller to people like the adjoining neighbours (Swift, anadarko, Chesapeake) and his old mates at Petrohawk - so it depends on what price he can get for it.

If he can convice potential buyers to pay a premium due to proximity to existing wells he will have well and truely earnt it.