re: lots of doe new presentation
Today’s presentation gives the project value on success at 100mbo net to SHG =A$5 billion @ A$50/bbl not US$50/bbl. As oil is trading at US$70/bbl = A$92/bbl, I took it that the difference of A$40/bbl was being allowed for costs of extraction, Hence my $20 figure.
I have just noticed the 22nd Aug brokers report by Tolhurst Noall on the SHG website, in which they give an unrisked valuation on the UK exploration at $12.38 so either way there is a huge upside on success
Quote TN • We have adjusted our valuation of the UK exploration potential for the revised prospect size (to 214mmbbls from 500mmbbls), offset by larger than anticipated equity interest in the project (50% vs our expected 25% as the farmout did not occur).
• Success would have a material impact on the company as it would instantly have net oil reserves of >100 million bbls valued conservatively at $6.96/share (unrisked) assuming NPV of US$15/bbl.
• Potential conventional and Coal Seam Gas (CSG) development projects in Queensland with cumulative net contingent gas resources of 379Bcf underpin the current share price.
Recommendation We rate Sunshine Gas as a Speculative Buy. The current share price is largely underpinned by the risked value of its potential gas development projects in Queensland. The leverage to the exploration potential of the West of Shetlands acreage is substantial.
Exploration success in the North Sea remains largely a free option.
Valuation Valuation ($/share) Unrisked Risked Producing assets less debt $ 0.11 $ 0.10 Upside Potential: Approved developments $ - $ - Potential developments $ 0.86 $ 0.34 Sub Total $ 0 .97 $ 0 .44 Exploration - QLD $ 0.63 $ 0.14 Exploration - UK $ 12.38 $ 2.48 Sub Total - Exploration $ 13.01 $ 2.62
SHG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
