This deal looks fantastic whichever way you look at it. When Arc...

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.