It is interesting how shareprice rises can be self re-inforcing,...

It is interesting how shareprice rises can be self
re-inforcing, the higher the shareprice the more investors seem to think the company is worth..

Just had a quick look at a SSN presentation, they are also operating in the US, they have had significant news in the previous 12months and have risen 10 fold, after nearly destroying the company.

SSN has an enterprise value of $200mil. Their oil reserves are valued at approx $30NPV a barrel which seems to fully priced into the shareprice. Based on this ELK should have around $3 per share attributed to Grieve when it started to produce, based on a 50% farmout.

Their main asset is a net 14,000 acre position in the Niobrara and it would appear around $175mil enterprise value is attributed to this asset. Ballpark (all things being equal) assuming we farmed out 50% for a free carry that would value Elks Niobrara at around 15cps.

Of the 3 estimates they used to present a Niobrara high side/low side case scenario, that would equate to between 2.5-25mil barrels recoverable from the Grieve acreage. Using a 50% farmout and SSNs $19NPV per barrel contingent resource that would equate to between 19c-$1.90 NPV per share.

I wonder if ELK are out leasing anymore acreage?????

SSN has certainly shown that there is significant upside for companys coming of a low base that can deliver regular good news, those companys are likely to trade at a significant premium to those around it and a large part of that premium is nothing more than momentum. ELK looks likely to be significantly re-rated as the news flow continues and momentum kicks in.

Cheers