positive, page-9

I don't see this as new information at all, but good on them for at least trying. No announcement from Otto I see at the same time.

I think rather than complaining about the way it has been handled, let us calculate what the announcement actually means and try to see why the Thai investor is buying in.

Anncmt says:

Proved 2.11M barrels
Proved & Prob 3.11M barrels
P3 ignoring these figures for now.

Once the placement is complete there will be 2.25b shares on issue at a market cap of $61M at 2.7cents.

Using the 3.11M P2 barrels of oil figure, that is effectively pay $19 per barrel for P2 reserves.

Of course this values all other parts of the company at NIL, ignores the upside of Galoc North (esp with that being close to the Galoc facilities) and also ignores the value (if any) of the Viking stuff and any other licences that could be farmed into.


Compare this against OEL. Their market cap is $104M and shares on issue are 1.14B shares. Adjusting for the fact that Otto has $26M of cash on hand and 4.42M of P2 oil at Galoc, then their oil reserves are at $18 a barrel.

There are other ins and outs for Otto, especially if BHPP step up to drill the farm in well in 2013 and this is a huge well and worth maybe 5 cents a share in pre drill rise in share price (if it happens).

These are pretty crude calcs, and not sure what to deduct from NDO share price for cash on hand etc (because I think they need it all frankly), but on face value it looks like Otto share price at 9 cents and NDO share price at 2.7 cents roughly equate to fair value against one another.

Will be interesting to see what Stock Analysis makes of this. Of course neither calc includes any upsiode for Galoc North, which while being an expolration well, would require a lot less to develop from the existing Galoc facilities.

The synergies of joining these two companies together would I reckon be very considerable. Still can't see it happening.