current market valuation of nge

I quickly crunched some numbers to come up with an initial quick and dirty valuation for NGE (ie for its 3 leases 267-268-269) as is.

Metrics used were recent acquisition of Rift Oil by Talisman for A$186.8m (which had two leases 235 and 261). This transaction no doubt would have played a big part in prescribing a value to NGE to determine the commercials of the jv agreement.

This precribes a market value of A$93.29 per lease, or for a 50% share A$46.65m. Interestingly for the 50% share of 269, Talisman will have to pay $57.2m which mostly be in the future when they conduct the drilling. Hence if we applied an NPV to this $57.2m I am sure we would get close to the A$46.65m.

So what does this mean, well for the 3 leases using the Rift Oil deal metrics this means the total current market value for NGE should be A$280m (A$93.29m x 3). Given current market cap is A$115m and share price 23.5 cents on Fridays close that means the current share price to reflect current market value using deal and jv metrics should be 57 cents ie some 33.5 cents off.

Interesting food for thought...feeling comfortable with your NGE holding at 23.5 cents guys....

cheers

Londoner