mississippian value to rfe, page-3

Nice article, WB. Wish it were true ... at least for the stocks I (we) own. I'd be rich and so would you !

On that article, it does not seem to take into account the cost of the wells. Ie if the NPV of a well is $8M and it costs $3M to drill, surely you would only pay a %age of that potential $5M upside (ie not $8M upside).

As an alternative (and more conservative) valuation, I've cut and pasted this from the AOK thread:

I note Osage Exploration (link at start of thread) has updated their web page. Notably:
- 10,000 Acre Lease came back with Recoverable reserves of 16Million BO (16 May 2011)
- 10 Days later they farm out 75% for approximately $5.5Million. The people buying in are operators suggesting that they are bringing more to the table than just $. This works out at 46c per barrel in ground (recoverable resource). Or alternatively $733 per undeveloped acre acre.

So RFE's 50M acres would be valued at about $37M? A successful well could reaonably quadruple the value of contiguous acres.