nwe broker report - extrapolating to tte, page-23

Shadders you have forgotten 1 key factor in your entire risk/derisk portfolio...

TIME.

yes, 20TCF is worth x dollars.

its the time it takes to get out of the ground you need to work out.

say the well is flowing at x BOEPD, whats your NPV over 10 years per well, how much does each well cost, what decline rates are seen and what is your net cashflow.

Having an asset in the ground is not worth 10%, not even close if you cant get it up.

Most people i know use 1% sometimes less as an inground untested asset, because its unsure of the costs involved in getting it out of the ground.

to get a value of 201 million for the share, you are going to need 2 things, a.) a reserve worth 4billion in ground atleast and b.) production to prove its viable, preferably at high rates which can get 10million + sales per year. (revenue + reserve potential)..

For example, look at MAD -> 192million barrels 2p, if we used your current derisking:

192*~90$/barrel = 17,280, 10% of this would be 1.8 billion dollars, yet as we see even with production the company is currently worth around 500-600million.

So including its 20million odd revenue per year your analysis would come up undervalued by a long shot, however the market has stated its value, its been this price for a while now.

BRU similar story.

If reserves are proven, IMO, looking at tops of 50-80million MC until a good flowing well, costs worked out + sales start.