potential valuation

A lot of numbers have been thrown around previously about what a potential discovery on block 105 could mean for NEN.

Well after having a look through an analysts report for valuations on KrisEnergy it may give us an idea on potential for NEN.

This report is on KrisEnergy:

http://sgx.i3investor.com/blogs/cimbresearchsgx/11490.jsp


The short of it provides a valuation for KrisEnergy based on potential discoveries on block 105 only.

Risked recoverable prospective resources (mmboe)

Low estimates: 25.6 (90% probability)
Add existing 2P reserves: 31.7
Potential new reserves: 57.3
Implied valuation: S2.21

Best estimates: 39.7 (50% probability)
Add existing 2P reserves: 31.7
Potential new reserves: 71.4
Implied valuation: S2.74

High estimates: 68.6 (10% probability)
Add existing 2P reserves: 31.7
Potential new reserves: 100.3
Implied valuation: S3.82

Based on current valuation of 1.25 per share and 1,046m shares then the value ascribed to each estimate is based on the following (assuming exchange rate of 1SGD = 0.84AUD).

Low estimates: AUD 0.843 billion
Best estimates: AUD 1.309 billion
High estimates: AUD 2.258 billion

This value on a NEN share basis (not attributing any value to current producing assets and purely on 105 upside, and assuming 550m shares on issue).

Low estimates: 1.53
Best estimates: 2.38
High estimates: 4.10


Starts to put in perspective what is the potential of success from a wildcat oil and gas target.

It is also worth noting that from risked estimates that block 120 could hold a lot more oil than 105 (talking about oil equiv now).

I think if we have any degree of success on 105 then people selling for 29 cents are going to be kicking themselves!