thanks for your response - and yes, it is only assumptions. Decline rate (15%) was based on some industry average I found for oil fields, and yes - given that they are currently reluctant to drill more wells it is somewhat higher. What number would you recommend to take instead?
Corporate costs (at present level plus inflation) are fully accounted for
New drilling - true, I didn't account for that, but than I assume that they only drill if they expect to get something in return (i.e. it should increase the value of their assets).
Dilution - yes, I put in the new shares issued so far (to RISCO), I didn't put in any new shares the SPP in January might bring.
Hedging - agreed, if they have to hedge at current oil prices (they don't have to, but this is what keeps their $10m tied up), than they will get for the hedging period less benefit from (hopefully) increased oil prices.
Still - I don't think I went through the exercise with a best case scenario - but not with a worst case scenario either. As well - I accounted all their other assets (except Manora and the gas) with ZERO value. Do they have really no value at all?
Question:
why do you think RISCO put roughly $10 million into TAP? Are they just stupid or do they plan to make money?
TAP Price at posting:
16.5¢ Sentiment: Hold Disclosure: Held
