Not familiar with EKA, Sector, but took a look (if that's what you intended). I see it was taken over by AUT at 45cps (initially recommended to REJECT and then later ACCEPT) which valued equity at $107M.
Looking at the Target's Statement (didn't look hard at any other figures) which had NPV10 of 2P @ $119M (and 94% of 2P - about 6.7MmBOE was in the target area). Avg net production was in 500 - 600 boepd and peak estimate of 2,000 boepd (in 4 years time based on development schedule).
@550 boepd its almost $200K per flowing boe @2,000 its about $55K per flowing boe EV/2P multiple was around 15 (no debt, $5M cash)
That all seems reasonable given the 1P/2P and the forward 12 mths look at to exit rate boepd at about 1,100 boepd (and so $100K/Boe valuation). None of which really took into account all the future wells, down spacing etc.
I agree with you it can be done and most certainly is done by sell side broker analysts who evaluate companies for future earnings and growth and who may have incentives for doing so.
e.g. Hartleys http://austinexploration.com/wp-content/uploads/2013/08/Hartley%E2%80%99s-August-research-report.pdf
IMO, it would behoove AKK mgmt to initiate a Reserves report immediately after say 60 day IP of 3rd HK drilled well. That will give a real good indication of the 1P PDP, the 1P PUD and 2P plus devlopement plan and downspacing possibilities.
AKK Price at posting:
1.2¢ Sentiment: Buy Disclosure: Held
