value of zola/wa-290-p/wa-49-r, page-37

I'm looking to probably open a position in TAP. Definitely more an investor than speculator but to make good returns need to find companies whose intrinsic value is selling at a considerable discount to the market.

Auto put me onto TAP (happened to be doing considerable research on KAR and the WA gas basins).

Spent a few hours this weekend going over a lot of 3rd party research - just the gas asset that is looking to be monetized (sold). That's my first key point of interest.

Not holding a past position lets me be completely unemotional - which can be difficult when you've held while a company has invested capital into a prospect and when it comes to monetizing the asset the return falls short. I can see that already in the thread.

This quote, taken from SKM report to WA Office of Energy in May 2011.

"The costs do not include the intrinsic resource value (cost of exploration) which may be approximately $0.50/GJ, or the value of liquids production, which can be considerable"

When I look at value that companies are building, I don't attribute a penny to "Prospective Resources" - that's 100% risk capital (simply because it is undiscovered PIIP)

The $0.50/GJ is fair value to be applied to 2C Contingent Resource - a discovery has been made - not necessarily known to be commercial and not much to be said about how much of that discovery is Probable - got to wait for 2P.

On that basis:
Tallaganda with net 49PJ
Greater Zola with net 2C of 38PJ
Bianchi - unknown the increase it brings but assume same amount again.
Also assumes no liquids.

Total 2C approx 125PJ implies value of $62.5M +/- 10%


Already with cash on hand plus sale of 351-P/290-P/49-R more than covers current share price. Every else is free.

Or flip side using $12-$15/BO 2P of Manora project plus cash less debt easily covers current share price.


Not a lot to dislike about TAP - but that's first glance.