Hi, I have very much enjoyed your expert analysis during the last couple of years SF2TH. Many posts are pointless but you always bring value to this forum. Thank you from a fully committed long term rather large % holder of this stock.
In respect to which pricing one should use I would use the independent firms pricing but would ask them for worst, most likely and best case pricing year on year. I would then present a separate scenario analysis NPV calculation for each of the three with disclaimers about the speculative nature of the forward pricing estimates. Not all investors have the ability to rerun the NPV model with variable pricing and this would present layman with informative information demonstrating how NPV can be impacted by the commodity price. Its not misleading as it would be a separate 'what if''' section of the OFS. Reference could be made to the three variable pricing forecast NPV;'s in the summary based on the independent firms price forecasts and state that we have used their firm one price forecast to be a prudent management team.
We could also use alternative discount rates of 8%, 10% and 12% but that would be too confusing for the official OFS. I think that a scenario section should be incorporated to provide more validated information to the market about commodity pricing impact. We all know that professional investment houses, potential partners and funders run their own models so why not give the less sophisticated investors insight, with a responsible presentation of how the commodity price variables impact the net present value of the future cash flows.
The market sleeping at the wheel is waking up to the potential of PSC to generate shareholders future wealth. Enjoy the exciting times ahead for all holders
PSC Price at posting:
49.5¢ Sentiment: Hold Disclosure: Held
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