merlin petroleum prospectus lodged with asic, page-7

Ian,

Great job you guys have done on the prospectus and more importantly, for actually getting this up and running.

I am a holder of Merlin as a pre-float investor and I am a holder of ITC. I've tried to put my thoughts together about the pros and cons of each of the JV partners and I've come up with the following. While appreciating that you need to be careful with what you say, can you run your eye over it and see if there are any flaws in my reasoning?

I have $20,000 that I want to put into this JV and so I have done some calculations of what might happen with a single small success in the planned drill program.

It's a little difficult to format it here on HC but my numbers look something like this:

VPE
Current Price: 2.2c
Shares on Issue (SOI): 1,349 million
Share of JV: 22%
Value of Find: $15m (say 1mmbo or 15bcf gas)
Value per share: 0.24c (22% x $15m / 1.349M)
No Shares Purchased with my $20k: 909,091
Profit: $2,224

RPM
Current Price: 9c
Shares on Issue (SOI): 130 million
Share of JV: 11%
Value of Find: $15m (say 1mmbo or 15bcf gas)
Value per share: 1.27c (11% x $15m / 130M)
No Shares Purchased with my $20k: 222,222
Profit: $2,820

ITC
Current Price: 7.4c
Shares on Issue (SOI): 187 million
Share of JV: 15%
Value of Find: $15m (say 1mmbo or 15bcf gas)
Value per share: 1.2c (15% x $15m / 187M)
No Shares Purchased with my $20k: 270,270
Profit: $3,246

Entek
Current Price: 20c
Shares on Issue (SOI): 40 million
Share of JV: 12.5%
Value of Find: $15m (say 1mmbo or 15bcf gas)
Value per share: 4.69c (12.5% x $15m / 40M)
No Shares Purchased with my $20k: 100,000
Profit: $4,688

Merlin
Current Price: 20c
Shares on Issue (SOI): 100 million
Share of JV: 27%
Value of Find: $15m (say 1mmbo or 15bcf gas)
Value per share: 4.05c (27% x $15m / 100M)
No Shares Purchased with my $20k: 100,000
****Plus 50,000 free attaching Options*****
Profit: $4,010
Based on the recent Tomahawk float I reckon it's fair to say that the Options are likely to trade at 5-8c and therefore are worth an additional $2,500-$4,000. Even if they trade at 1c they are worth $500.

So by my numbers, paying 20c for Merlin on the basis that the JV will have a moderate success in the Cooper is some better than any of the other JV players. Add to that the Entek float is closed and I can't send money to them if I want to!!!

Thoughts/comments appreciated.

Cheers

Badfish