The actuall number of shares on issue is neither here nor there (it does not matter whether a company has 300 million shares, or 3 billion shares on issue: ultimately it's the market cap that matters). The current market cap (shares x share price) is circa $100 million. AP candidly stated that he wanted a "billion dollar company within three years" about a year ago, implying that by the end of 2026 a market cap of $1 billion was his target. That ten-fold increase sounds impossible to some, and achievable to others. Using some thumbnail-dipped-in-tar maths, lets assume that A2 and the consecutive Unit 1B wells produce something like 15,000 bopd (ref: page 21, presentation of 20th December 2023 - which although it needs to be updated [re A3] may still stand as the basis for AP's original comment). 15k bopd is 1.64 million barrels to MAY per year (30% share), or about U$49.3 million of net income (assume U$30/bbl for a net return after costs - again t-d-i-t approach). That $1 billion number would require a PE of 20-to-1, which is probably a tad high, unless something else can either de-risk the reserves OR be added to the pot (NTA) from elsewhere. Realistically, then, "success" of 15k bopd probably translates to a market cap of only half what AP is aiming at (but there are arguments as well that MCAP = SHARES / (NTA*PE + RESERVES), so any number between $500 million and $1 billion could find a decent supporting argument if you tried hard enough).
So Steve: 30 CPS is not entirely out of the question, but I suggest you may be waiting two years before you see it. A more realistic one year target is that 12 CPS top we saw previously, being a 4x increase from the current price. All dependent on resolving A2 and completing the drill program with success out of each new well. It may indeed undershoot that level (if there are further delays or too many issues) or overshoot that level (if AP and the team have their digits well away from their nether-regions for the next year).
Either way, certainly 3 cents is well south of both those numbers. Value is the word that comes to mind.
Kit.
MAY Price at posting:
2.9¢ Sentiment: Buy Disclosure: Held
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