Assumed year 1 total oil flow of 15k bpd, decreasing by 10% yearly (probably will be quicker than that). Assumed field would only operate for 5 years (will be longer than that surely).
Assumed 40% of revenues per year gone to tax, depn etc, and $80/bbl crude. Also 15% WACC over the 5 year period.
I get an NPV over the 5 years of $164m. How much did they pay for the Galoc stake? Divide the 164m by the cost, and if its greater than 3 then you are on a good capital project.
In term of EPS, year 1 EPS with a billion shares comes to approx 5c. On a P/E of 15 (lets be generous), thats $0.75.
Still a 2 bagger opportunity based purely on fundamentals. Basically NDO has to find a decent oil field in the next 5 years, or it's pretty #$@#&*.
NDO Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Not Held
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