There are so many things happening over the next 2 years or so, that such predictions become virtually impossible.
One of the most important things about NDO now however, is that they finally have a growth strategy...in which case, the long term price will not be limited by current assets or activities.
From what we already know however...and assuming of course, that "everything goes right " as you say...
1-3 months:
a. Nido/Matinloc work over program completed, production increased to at least 1,500 barrels per day...of which, about 375 barrels will go to NDO.
b. Confirmation of new JV partner's funding arrangements...which should remove any doubt remaining in the market place regarding the Galoc development.
3-6 months:
a. Drilling and tie in of Nido1-X1 structure, which should add another 1500 barrels per day production...of which another 375 barrels will go to NDO.
b. Submission of the Galoc development plan to the Philippine DOE...with a relative quick approval process
6-12 months:
a. Reprocessing of seismic on the existing North Sea gas structure confirms it's possible "commerciality", which leads to the drilling of several development wells and eventual production of over 20mmcf/d gas...which would be fed directly into existing "under-utilised" infrastructure within a relatively short period.
b. First of two horizontal development wells to be drilled at Galoc flows at 6000 barrels/day on DST...this initial well will be cased for future production, but is predominately drilled as final confirmation of field engineering and off take design studies.
12-18 months:
a. Drilling of second development well and final development of the Galoc field, with initial production set at some 10,000 barrels per day...of which some 2,230 barrels will go to NDO.
b. Acquisition of additional North Sea acreage, at which time they should be able to internally fund all exploration studies and drilling.
c. Farm in partner for the Pagasa Turbidites, with possible drilling thereafter...this would be very positive as there are several 200m+ barrel prospects and some 2b barrels of prospects in all.
18-24 months:
a. Expansion of Galoc field, with at least 4 additional step out wells and corresponding increase in production infrastructure, designed to increase production to some 30,000 barrels per day...of which some 6,680 barrels will go to NDO.
b. Drilling and development of new and existing North Sea acreage.
24 months and over:
a. NDO becomes takeover target?
b. NDO acquires other oilers?
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Obviously, this is a best-case scenario...but you did say if "everything goes right"!
Exactly how the market might react as each of the above "milestones" are met is hard to say...but it would be fair to assume that NDO's share price at any given time, should be a reflection of the markets general perception that things are on track.
But just for discussion purposes...and assuming the above "best case scenario" is met, we can use the following comparisons as a guide...
Current situation: (16/10/04) Production: 170 barrels/d net Shares on issue: 500m (fully diluted) Cash at hand: $3.3m (for dilution purposes) EPS: .001 cps Share price: 4.3c
Projected situation:(16/10/06) Production (oil): 2980 barrels/d net ? Production (gas): 10mmcf/d net ? Shares on issue: 600m ? Cash at hand: $3.3m ? EPS: .05 cps ? Share price: 30c ?
Projected situation:(16/10/08) Production (oil): 10,000 barrels/d net ?? Production (gas): 20mmcf/d net ?? Shares on issue: 600m ?? Cash at hand: $3.3m ?? EPS: .20 cps ?? Share price: $1.20 ??
To be fair, there are so many assumptions to be made in putting these figures together, that they really are close to worthless.
I guess an important point to remember however, is that the market tends to bring future income and growth potential forward into the current price...so simply looking at existing activities and production when trying to come up with a "valuation" is not always appropriate.
In the end, if the market believes in NDO, any future potential will be bought forward into the shareprice accordingly!
Cheers!
NDO Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
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