poseidon 15 - 20 tcf???, page-3

"UBS US analyst has done which mentions that COP thinks Poseidon could be as large as 15 - 20 tcf."

Jim Mulver (CoP) has always been VERY VERY bullish about the size of the resource from the jump. If it proves to be 15-20 TcF we are all going to be laughing. I'm thining 7-9TcF is a safer guess.

The stock is still terminally undervalued though, thanks to market sentiment. If real confidence returns to the market, expect this to be above $7 in no time.

Let's recap:

Browse Basin---> we all know what's happening here. Let's hope for 15-20 TcF.

Bonaparte Basin:

- KAR is the operator and 66.67% equity holder of AC/P8, with JV partner Talisman Oil & Gas (A Canadian major active in Aus and PNG).
- The permit is located 580km NW of Darwin within the proven hydrocarbon province of the Laminaria High trend.
- KAR completed the geological and geophysical evaluation and currently carries a commitment to drill an exploration well.

Santos Basin:

- The Santos Basin Blocks are located 112 km off the coast from the Santa Catarina region of Brazil. KAR has 100% interests in five offshore exploration Blocks S-M-1037, S-M-1101, S-M-1102, S-M-1165 and S-M-1166, totalling 865 sqkm.

- KAR has received the final processed seismic dataset and plans for drilling campaign. As we know the data room doors are open for the majors. Petrobras' Maruj discovery of 550,000,000 barrels is literally on the doorstep of KAR's north east block. I'm thinking if we find a few hundred million in any of our 5 blocks we should be sweet.


Tumbes & Maranon Basins, Peru:

- KAR has earning up 75% interest in Block Z-38, an offshore block of 4750 sqkm located in the Tumbes Basin, and 100% interest in Block 144, located within the onshore Maranon Basin, Peru. Z-38 was completed 3D seismic program and is currently under regulatory approval applications and planning processes.

- The block is expected to be drilled in late year 2012. Block 144 is in the process of geotechnical, social and environmental work reprocessing of an existing 1,000 km of 2D seismic data.


The Brazilian and Peruvian assets as you all know were to be "spun-off" into an IPO on the Bovespa, until global conditions and risk appetite deteriorated.

The deal was $771m USD for 31.9% equity stake in the SA assets, essentially valuing the total SA assets at about $2.4 billion.

Using that as an "everything is ok with the world case" on current shares of 221m it would equate to about $10.85 per share for just the SA assets.

Let's assume the IPO price very optimistically overvalued the SA assets by two thirds, and really they are only worth $800m all up. That's still $3.60 per share, excluding any upside from Browse and other Aussie assets. Stock still seems cheap to me. The market isn't ascribing KAR's TOTAL holdings "all in" alot of value. Any upside surprise in Browse and the stock will move very fast. Any value definition in Santos and the stock will move very fast.