still a good spec

My Spec calc for ELK

I thought I'd have a go at calculating what I think could be the potential Share Price for ELK once 8,000 barrels per day can be produced in 2.5 years time (it's a bit of a long time for traders but not for investors)


8,000 barrels per day = 2,920,000 barrels per year

Assume exchange rate is $0.94 = A1.00

Estimated price per barrel=$80.00=$85.10 Australian Dollars

Sales = 2,920,000*$85.10 = $248,492,000.00

Assumption:
Operating profit of 15% (this is already net of expenses in relation to debt and CO2)

Profit = =$248,492,000.00 *15% = $37,273,800
Assuming JV 50% = $18,636,900 profit for ELK

Shares on issue = 61,000,000.00
(Options not included)

PE target of 10.00 (conservative enough for me)

Earnings per share = $18,636,900 /61,000,000 = $0.30552 per share.

EPS/SP = PER

$0.30552 /SP = 10.00

SP = $0.30552 *10.00 = $3.055

Price Target of $3.00 in two and a half years.