Everyone has a different opinion on this.
Evolution Capital did their valuation in the middle of 2023, concluding that the Sum of Parts estimate was $0.23 per share:
This assigned a valuation of $650.8 million ($0.193 cents per share) to Block 9. Their Block 9 components were as follows:
The prospective resource total included 103 mmbbl from Amistad (now considered to be primarily Unit 1B), 70 mmbbl from Marti, and 109 mmbbl from Alameda. In essence, of the total prospective resource of 282 mmbbl, Marti contributed about 25%.
On 25th March 2024 the company published McDaniel's updated assessment, which upgraded Unit 1B to Contingent Resources of 46 mmbbl, and Prospective Resources to 90 mmbbl. McDaniel's also noted the Eastern and Western divisions (which varied in confidence levels). Melbana then noted that McDaniels would be "finalising" their work on Unit 1A. This will further increase the numbers from Amistad.
My point is this. The vast majority of the valuation placed by EvoCap (and others) hinged on Amistad and Alameda, not Marti. Further, the $0.193 valuation of Amistad was in 2023 with EvoCap yet to publish revised numbers. Simple maths will tell you that it will be north of $0.30. And what we are seeing is the McDaniels numbers coming in significantly above the EvoCap numbers (which themselves were well aligned to the company's previous estimates). So assuming this pattern repeats - roughly - in Alameda, there will be further resource and valuation uplift post-Alameda.
Whether 5 cents or 7 cents is the base "flop" (failure) number for Marti is actually not overly important in the broader scheme of things. The company should soon receive the upgraded 1A numbers from McDaniels (the last assessment of 1B took roughly 13 weeks, and we are now closing in on that timeframe since they commenced their assessment of 1A) and will most likely use that announcement as a platform for clarifying their "four well, production from Amistad in 2024" plan.
So to your point: I am not sure "
pumped to 7 cents based on expectations of a flow result from Marti" was entirely correct. If anything, the opposite is true - that the recent slump in SP is more the result of impatience and the failure of the market to de-risk MAY in its entirety. Once Marti or Alameda flow, and/or when we get upgraded resource numbers and plans for Alameda, some de-risking will occur, and the deep discount to EV will erode, albeit not in one day but over time.
At least, that's the way I see it.
Kit.
(20min delay)