This aspect of today's announcement has not really been discussed and I would love to hear some thoughts on this.
Based on today's announcement, the Gulf South participation payments can be equated to Gulf South paying approximately $27 per barrel of 1P reserve.
At a share price of $1.20, the MAD market cap equates to $5.25 per 1P barrel. If we use the $27 of the Gulf South participation, then MAD shares are fairly valued at $6.17 a share.
Given we closed today at $1.285, that would lead to a fairly large upside.
Today's action was fairly muted given the above. It is just a matter of waiting for the analysts to do their thing and the instos to buy on the back of this? Do we just sit back and enjoy the ride? Or am I missing something?
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