Enterprise Value/brl 2P reserves, page-8

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Al99

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23/06/15

11:02

Post #: 15513086
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Originally posted by ronstieb ↑

A199
I dont follow AWE closely but note you quoted Barrel of Oil Equivalent (BOE)
In AWE's case, thats roughly 2P reserves of ~44mmbbls oil and ~36BCF gas going by the graphic in their May 2015 preso.
I was just quoting the EV for HZN's producing 2P oil reserves, which typically has a higher $$ value than the energy equivalent in gas.
HZN has 50% of production hedged at USD95/brl until June 2016, whereas I dont believe AWE has any hedging ?

A recent transaction was OEL selling Galoc 2P producing reserves for USD32/brl. Galoc is offshore Philippines, somewhat complex structure, several horizontaly drilled producers hooked up to FPSO.
Risco bid ~USD30brl before POO tanked. After POO had tanked to ~$50/brl, BCP/nido counterbid at USD32/brl and closed the deal earlier this year.

Of course, EV/brl is a rough measurement, and it depends whats going on with the other company assets.

Agree with you that a corp action is required to unlock the value of HZN's PNG contingent resources.
I would prefer an asset sale.

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Ron

I agree with what you are saying about the energy equivalent values and it is just one method of valuing assets in the game.

You were suggesting that USD23 was cheap, which it is not. In comparison with recent corporate activity, it is a lesser value, but these are not market-related values. They are also Pilipino assets which are the best (or one of) fiscal regimes on the planet, where China would be at the other end of the spectrum.

I hope this clarifies the view a bit.

Cheers, Al

HZN Price at posting: 8.9¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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