I believe this is still so very, very cheap. Here's a bit of me...

I believe this is still so very, very cheap. Here's a bit of me rambling:

I feel that by far, the majority of today's share price increase is just factoring in the transaction price from an asset sale which was FAR greater than the market (including myself) was clearly pricing in. And obviously removing the discounts based on future funding needs.

I know the Financial Review stated rumours of prices up to and beyond $50,000 /acre for Helis' acreage, but it goes without saying that the market was clearly pricing in a figure absolutely nowhere near what was achieved (I'm sure partly due to the risks of a transaction not occurring).

Now I'm sure that today there would have been some minor residual re-ratings in the value of SEA's other Bakken properties in particular, but I don't think it'd be significant at all.

On top of the $145 million cash (debt free after the closing of transaction), released in today's presentation, I think realistic on-market values for the other assets would be something around:

Developed/Proven Assets (inclusive of reserves and production):

3,100 net Goliath^ acres: $35 million
1,500 net Phoenix^acres: $40 million
2,650 net Wattenberg acres: $20-25 million

Undeveloped/Yet to be proven Assets:

9,000 net Niobrara* acres: $40 million (undeveloped)
24,000 net Mississippian/Woodford acres: $50 million (undeveloped)

I'm basing these prices at the present day, ignoring the upcoming reserves increases for each project.

Total: $330 million, or ~$1.20 per share (before tax).

Discounting some of that for tax, and Adding on some anticipated positive upcoming reserves additions (using a rough estimate as to how they'll look), I see $1.00+ as a decent fair value benchmark, considering market conditions.

Chances are I'll be holding on for 2-3 times that in the long run IMO, assuming current market and oil/gas prices stay at similar levels. (Reasons being is that SEA is the best Long Term stock with upside I've come across in a long time, and whilst I obviously don't want to lose money investing, I can technically 'afford' too.)

Obviously companies aren't valued completely on asset/financial values (some higher, some lower), but SEA's management have demonstrated such fantastic performance and execution over MANY years, that I completely believe that the company deserves to be priced at the higher end of the range (for mid-cap oilers). As said plenty of times by many posters here, time and time again SEA continue to make the right moves.

All IMO, completely my own thoughts.

Notes:

* Niobrara has some reserves/production, but I'd still classify it as Unproven as of yet.

^ This isn't including the mystery bakken acreage increases that we've seen in recent company presentations, of about 500 acres. (which I'm assuming are in the Phoenix/Goliath properties, now that South Antelope is ruled off the list).