HZN Valuation - Independant Valuation

I must have too much time on my hands, or I am trying to avoid the gym today.......

I have extended the Grant Samuel Valuation slide (orange row) from the AGM presentation in the following ways

• included valuation model to unrisked valuations (red columns)
• include a risked mid-valuation column assuming PNG = $0 (green column).  Realistically, PNG is either worth nothing or at least the minimum unrisked valuation.
• included the dilutive effect of the IMC refinancing deal (yellow row).  These are what we should look at.
• included impact of alternate financing of rights issue at aud$0.05.  I believe that $0.05 would be optimistic, and it would have been the next best alternative (purple row).  Clearly a worse outcome from my perspective.  In addition, we could have avoided the IMC dilution effect by purchasing on market below the rights issue price.

We have Grant Samuel Independent Expert Valuation base case of aud$0.085 (close to double the current share price) on a fully diluted, mid-risked case with PNG worth nothing .  So there should be upside without PNG!

If you include the GS low valuation of unrisked PNG (it is either worth nothing or at least the minimum of usd$274m), then we get a valuation of aud$0.29.  If someone buys and uses HZN gas assets, they get usd$130 FID payment to offset their purchase price.  It is not hard to imagine that HZN PNG gas assets will fetch more than the minimum.  Take a mid-valuation of unrisked PNG and you get in excess of aud$0.40 / share.  Based on the InterOil deal, the cost of exploration in PNG (see Strickland well), the usd$130 FID payment, it is not hard to imagine that a sale price would be closer to the GS high valuation, resulting in a share price in excess of aud$0.50.

Enough dreaming, and hopefully not purely wishful thinking.........hopefully you find the table below useful.