I calculated Range's market cap based on data in the prospectus...

I calculated Range's market cap based on data in the prospectus and got 45mil (workings below).

I also calculated the smith gas reserve that would be needed to underwrite a 45m market cap and got 65Bcf (workings also below).

The smith drill was to go after a 80Bcf gas prospect. Crest also found oil and saw enough to want the adjoining 560 acre lease. You might read that as good omen for the reserve figures due soon. 65Bcf also doesn't account for any oil in the smith reserve, Georgia, Puntland onshore or Puntland onshore. So count them as liabilities if you will but the entertainment value of this post is to put them across as free carries!

Does anyone have any comments on these calcs (made GMT AM before the AiM went up another 12%)

Market cap -

Total shares in issue including exercised options at the end of 2011 is likely to be around 1,098,481,762. There are $0.05, $0.50 and $1.00 options in issue and I've assumed that only the $1.00 ones won't be taken up because they expire on the 1Oct2010 so are very unlikely to be in the money (happy to be proven wrong on that one!).

Without knowing how many shares are in issue on either market I'll use 0.04 to give a best guess at the market cap of around 45m (1,098,481,762 * 0.04).

757,976,657 - shares in issue after offer
64,907,186 - $1.00 options on or before 1Oct2010 (likely to expire)
340,505,105 - $0.05 option on or before 31Dec2011 (very likely to be exercised before that date)
3,177,029 - $0.50 options on or before 30June2012 (my guess would be these will be exercised before that date but there's some ground to make up first).


How I worked out the SP to underwrite

Market cap is GBP45m which is US$74m
Gas at US$5.691 per mmbtu
So to calculate the number of mmbtu's required to generate $74m of market price gas 74m / 5.691 = 13002987mmbtu which is 13BCf.
Ranges stake is 25% so 13Bcf / 0.25 = 52Bcf.

Add 25% premium for taxes, onstream costs etc and you get to 65Bcf.

Pretty rudimentary but Range might be undervalued you know...