On a risk adjusted basis all the components of Range are worth varying amounts -
This is kinda the way I think of it -
The derisked number is what I guess the current holding is worth (yes I plucked these numbers from where the sun don't shine) and the risked number is a guess on the kind of discount factor you need to apply given the political and drill associated risks.
Feel free to change the numbers to suit you - there are people that would have a much better idea what each thing is worth.
Puntland offshore gets a big weighting cause they still have 100% but after farmin and risking it it is probably only worth the same to Range as the 20% onshore value.
So In theory I reckon Range could be worth as much as $3.50 id it had actually found everything they are looking for and were safely producing and selling the stuff - after you discount all the risks I reckon it is only worth about 15-20c right now. Still plenty of room for a rally from here but keep an eye on the news flow - obviously flow rates from Smith could change the value from 4c in my mind today to 8c putting a Range valuation in the 20s and Russel being proved a winner could add another 2-4c. Until we know more about Trinidad I am only ascribing 2c value - over the next few days we can see if it is actually worth more. Obviously any good news on Georgia or Puntland has the potential for big valuation changes - Rig mobilisation from AOI would make the onshore puntland value double in my book from 4c to 8c and obviously success could be worth up to 20-30c but I wouldn't ascribe a value above this for years - till they are safely pumping black stuff and have secure infrastructure build all around. A farmin for offshore could be worth 5 or 10c depending on their credibility.
Much potential but for now I can see trading interest on hype up to a max of 15-20c and then it would need substance. The volume on AIM last Friday was absolutely key in my mind - you can see on any chart the rising formation and increasing volume - don't underestimate to power of money flow.
RRS Price at posting:
10.0¢ Sentiment: LT Sell Disclosure: Held