In the absence of other professional analysis the EH methodology is easy to understand even if you don’t agree with the in ground value of oil per barrel.
I believe EH used FAR, IVZ and 88E as comparatively similar explorers who all reached the vicinity of $250M MC leading up to drilling.
If you instead took $2 USD per barrel at 1BBoO DISCOVERED (not recoverable) then EH’s 35 cents reduced by a factor of 5 would be 7 cents AUD per 1BBoO DISCOVERED.
IE: 10BBoO discovered = 70 cents AUD using the EH formula
Once the drill is successful I am sure EH will move from DCF analysis to NPV based valuation.
What most investors would be quietly hoping for is the 1st drill is successful and we have a result similar or better to Galp and that news makes major international financial news triggering a run on PCL based entirely on FOMO where logic and analysis such as SOI, price per barrel in ground and other factors are ignored in the rush.
I would have thought we would have the resource estimates by end of Feb early March, unless WDS farm in (and I believe partially farm out) before then.
If EH is right we should see the SP somewhere close to 4 cents AUD as we move closer to drilling.
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