There's been a lot of talk that MPO is undervalued - I'd just like to throw in some numbers to generate some discussion about just how undervalued this company really is.
Looking at China - the recent announcement regarding this project gave a resource estimate of 40.5 billion cubic metres! This is equivalent to 1281 PJ (1PJ = 31.6 cubic metres gas). This resource alone starts to puts Molopo in the same league as the bigger players - bigger players that are trading at many multiples MPO's market cap!
Assuming a low-case scenario of gas prices in China of US$275/1000 cubic metres - this puts a value of US$11.1 billion (AU$14.1 billion) on this reserve! There's obviously a lot more work to be done on this project and it isn't all Molopo's but it starts to give us an indication of just how undervalued this company is.
Especially when you then also start to consider the many other projects they have a vested interest in.
Consider MPO's US interests in light of this qoute from Peter Dea, former CEO of Western Gas Resources (now taken over by Anadarko Petroleum):
"The average rate of production decline for a natural gas well has gone from 17 percent to 31 percent and is expected to continue in this direction. In other words, half of the nation’s natural gas by 2012 will have to come from fields that haven’t even been discovered yet."
MPO has 50% of ~5700 acres in a gas project in West Virginia – they are very well positioned to take advantage of a massive market opportunity unfolding in the US.
And then we have South Africa where MPO owns 50% of a JV company that has applied for exploration rights in two provinces.
MPO is also actively CBM screening in India with local partners.
And then of course there's the suite of near term projects in Australia.
If you ask me, you'd have to be a bit of a fool to be selling shares in MPO at the moment!
Just my thoughts.
Cheers to all holders – almost definitely good times ahead!
MPO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
