You guys are dreaming if you think amadeus is worth $1.25.Have a...

You guys are dreaming if you think amadeus is worth $1.25.
Have a look at what reserves are being valued at in the U.S. Transactions in this area are based on a proven reserve basis not a proven + probable basis like in Australia.

If you look at the last reserves price issued and multiply by the average transaction value ($15 per barrel from Herold) in the states you get an implied value of US$163MM less the debt on the balance sheet and you get an A$ share price of 59 cents.

Another way they value assets in the states is by using a multiple and multiplying this by daily production. The current average in the U.S. is US$78,000 (from Herold) so you would multiply this by daily production (2093 boepd per the last quarterly). If you are generous and use US$85000 and 2200 boepd as the daily production you still only get an implied share price of 67 cents - so based on the last quarterly and current US average you get 55 cents.

They are in a good cashflow position which is great but they are using this to drill wells and not getting the production and value kick. Investors need to remember they are in the U.S. drilling wells that pump a couple of hundred barrels of oil a day and they tail off, they're not offshore GOM where you can get 50,000 bopd or so. The other issue they face is they have a heap of bank debt with wells fargo which they have fixed at 4.5% or so and they have an ugly hedge position which is expiring monthly so the higher the oil price the worse it becomes for them.

I think this company has done well and come along way but the market is usually right in terms of valuation otherwise a predator would have had a crack. At the moment I think they are fair value and are no way near $1.25 unless they find a huge oil find which in the U.S. is very unlikely.

Good luck to all, I just thought I would add some insight as there is far better value in the energy sector than this stock.

These are my views so do your own research. I'd e keen to hear how you value them at $1.25.