This deal looks fantastic whichever way you look at it.
When Arc was trading around a $1.32, each of the 6.7m BOE was valued at A$44.78. If you increase the shares on issue to 300m and the reserves to 19.4m and apply the same valuation it comes out at $2.90 per share. Around the same market cap. as Roc which has about 40% more 2P reserves but less current production. I'm not suggesting that this will happen allow for the 40% and you come out around $1.90 and that IMHO, is approximately what they are worth.
Look at it a different way. Roc's market cap is over $950m. Arc with 300m shares after the placement @ $1.50 would be valued at $450m. Roc have 40% more 2p reserves, take this off and you still come out at ~$2. No China, no Mauritania, just good old reliable and stable Australian production, close to infrastructure and markets and still with great exploration prospects.
Or another way. Brokers who covered the stock valued it at ~ $1.60 prior to this deal which has easily added around 20% to Arc's value even after the share placement which is not dilutive but accretive - 30% more shares for 190% increase in reserves! That comes out at ~ $1.92.
On top of this there is a real chance that on success of 1 or 2 of the 7 exploration wells being drilled in just the next few weeks would add significantly to the share price with interests in each varying from 15-100%.
What other company is drilling such massive wells when taken in the context of the potential impact it's share price in 4 different regions over such a compressed time period? This alone along with further wells after July make it worth $2 IMO.
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Last
15.0¢ |
Change
-0.005(3.23%) |
Mkt cap ! $50.5M |
Open | High | Low | Value | Volume |
14.5¢ | 15.3¢ | 14.0¢ | $2.910M | 19.44M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 239951 | 15.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
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15.5¢ | 572545 | 10 |
View Market Depth
No. | Vol. | Price($) |
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1 | 8890 | 0.150 |
4 | 370000 | 0.145 |
12 | 874135 | 0.140 |
6 | 229099 | 0.135 |
2 | 27699 | 0.130 |
Price($) | Vol. | No. |
---|---|---|
0.155 | 564345 | 9 |
0.160 | 532696 | 15 |
0.165 | 426070 | 10 |
0.170 | 447140 | 5 |
0.175 | 82258 | 3 |
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