In 2008, AJ Lucas bought Mitchell drilling (now Lucas drilling) for $150 million which was 5.6 x EBITDA.
Lucas drilling made $5.6 million EBITDA in the March 2023 quarter. So annualised EBITDA might be $22.4 million. Using an EBITDA multiplier of 5.6 gives 5.6 x 22.4 = $125.5 million value for drilling business.
AJ Lucas bought 45% of Cuadrilla from Riverstone in February 2020 for $2 million after fracking was banned. So Cuadrilla might be worth about $4.5 million.
$125.5 million Lucas drilling + $5.5 million Cuadrilla - $100 million debt = $30 million net worth.
$30 million net worth / $1.38 billion shares = 2.2 cents per share.
The march 2023 quarter was a bit of a disapointment after the very good December 2022 quarter. Hence the recent collapse in the share price. If the June quarter has better profit then the share price should recover.
AJL Price at posting:
1.6¢ Sentiment: Hold Disclosure: Held
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