You ask an unanswerable question :)….but we can speculate.
As well as the ifs and buts, add in maybes and wannabes :)
Here is my take to your question (my view & opinion only)
What you say is quite correct. Although the numbers you mention are really pointing to a discovered & producible resource. Firstly we have to delineate a potential resource, which is in progress. You can then start to run prospective numbers.
Just to use a very low $0.10 (yes 10 cents), per barrel at this time, and you can get some very good numbers (purely speculative). Once we get the CPR in, then this can be increased quiet substantially into speculative $dollars per barrel, then once proven through to production you can apply a base $10.00 in ground to the proven resource. (basic guide), Once we producing. Then... :)
The thing for me, with what we know now, and considering other information available (neighbouring basins, amongst others items), is that I have made a hopefully correct assumption that the CPRs will prove to be very positive. Our risk has already been reduced substantially since IPO, but yet to be acknowledged by the market.
I also considered the shear chance of success….given our already owned licenses, EXCLUDING Eyasi-Wembere, EXCLUDING Zambia……With the Rift successes and positive 2D to-date, we’d have to be damn unlucky, not to get 1 SWEet hit in either… 12B, K-K’s three basins, and Pagani’s two basins?????
Now add back in Eyasi-Wemebre at 8 times the basin size of Lokichar, and a potential license or two or three from Zambia…..how unlucky could we be……it would be time to give away the share market for me :)
Realising 1 x 200 million barrels strike, or maybe 2 x 100 million barrels strikes….anyway I look at it…the potential is there and is actually increasing as we and our neighbouring companies progress.
To me, it’s not even pie in the sky wishful thinking….I think I am actually being very conservative in my thinking of 200 million barrels…..and am really confident of far exceeding this.
Now success in EACH basin (not just one, or 2 x smaller hits)….well, then it gets a bit mind-blowing…..you COULD BE talking multiple Billions of Barrels and not even bat-an-eyelid at the suggestion.
Either way it is easy to see how undervalued we are at this time…IMHO.
Leverage at these prices, to a potential discovery of only 200 million barrels is quite astounding. = x30.
The TEN FOR ONE report….refers to basins….we are shortly going to be able to break this down into targets…..quite feasible that we might soon be FORTY for ONE in due course. Lokichar Basin is a prime example of the potential, as is Uganda’s Lake Albert Discovery.
I am placing a lot of faith and respect for and in our Management. They have a proven history of wealth creation, and have a lot invested themselves…..certainly a lot more riding on this venture than most companies and their directors actual exposure I have looked at.
From the initial post in this thread, I believe the Company Management will have many options available to them. I believe they have the skills and experience to make sound judgements for the benefit of shareholders and the Company.
I would really love to see SWE drill…..but….If someone came knocking early next year, and said we want to buy SWE and we will pay very well….., well, for me it would be life changing…and making good decisions is what its really all about.
Whilst I do not see problems for us getting money in the future (in fact they might be falling over themselves to offer us money)….And we may be attractive for T/O offer, but there is more than one way that value can be recognised, and/or one company can take over another….
What if Africa Oil came to us and said we will give you 1 Africa Oil share for 5 SWE shares?...LOL (ok, 1 for 5 might be pushing it a bit :)…buts it an example.
If this or a cash offer came I that I was keen on….and was accepted by Management….I’d be asking Dr D and the Team…..... ..........what are we doing next? :)
SWE Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
