I believe that valuation is based on a 5 billion barrel discovery and assuming a US$20 per barrel in ground value.
So 1 billion net to PCL (who will hold 20% free carried) at US$20 a barrel.
For US$20 billion or AUD$30 billion
Divided by 8.5 billion shares on issue
Equalling $3.50 a share ?? ($3.52 to be exact, or $3.513 as the Euroz note)
Obviously this is at the extreme end of the potential and the analyst is making a pretty big assumption that a oil discovery is worth US$20 a barrel in ground. But for those that haven't read the research note there is a smaller case and best case scenario depending on barrels discovered, value per barrel and $USD forex etc etc.
So it could be 500m barrels or 1 billion barrels. (Or Zero Barrels !) (Or 10 billion barrels !)
And maybe it's only worth $5 per barrel in ground ... who knows.
Regardless, these are extremely large numbers being thrown around and the hype around this drill will only get larger in the coming months.
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