hdr seriously undervalued !!, page-14

Tas has posted numbers that indicate that HDR isnt fuill of blue sky at two bucks ; if you want to poke holes in those numbers, come up with some evidence.

Ian Whitchurch


and from tastarga

My mini calculator works this way:-
Three existing fields= approx 600mmbls,(HDR share 21%,126mmbls)
Price per bbl around US$7, (up from US$5 to reflect the new energy world order of north of US$30 bbl spot pricing)=A$10bbl
Multiply the above=$1.26 billion, divided by 650m shares on issue, equates to around $1.95-ie the current price near enough.
My undertanding is that the proposed programme has 5 wild cat areas- if we assume the target is around 200mmbls in each instance, success to HDR would represent 42mmbls and using the above pricing strategy,equates to around 65cents per HDR per success.
If only two come in,(and WPL is very confident), HDR could be around $3.25-ie current price plus two times 65 cents.
If three come in, well you have just doubled its value.
All of this ignores the other exploration interests elsewhere as well as inside the Mauritania blocks on targets still to be tested.
Looks like an attractive punt over coming months.
Cheers,TAS


There is plenty of blue sky in those assumptions ....

600 mmbbl in 3 fields
Tiof depends on appraisal holes - if Woodside were certain they wouldn't be drilling three of 'em

Banda is not going to produce a drop of oil before 2010 and probably not this side of 2015 EVEN IF a gas project can get up. Gas is a very long lead time business. So forget Banda oil for your valuations.

Wildcat drilling
Sure there's a good chance of further success. But ask yourself this question - what will happen to the share price if the first wildcat or two is dry? Anyone here remember Courbine or Thon?


The point is that the current market price is already assuming good results (= blue sky) from this year's program. If it all goes well the price could easily go above $3. If it doesn't go well - back to $1 Mr Hardman.

So if you're buying or holding at $2, just be very clear about the fact that you're punting, not investing.