Well its now a market cap of $8m and has a 10% share of a potential 50m bbls of oil .
So my rough calcs are 10% * 50m * 25% recovery rate * $40 per barrel (post costs, royalties etc) = $50m net to VIL (ignoring additional capex requirements and time value). So call it $30m. (4 times current mkt cap).
There's upside to that number based on comments from the operator whereby the 30 metre column could be 95 metres. Also their are other zones of interest (Gas?).
Plus (and this is for the long term) the ability to farmin to future drills in the chorbane prospect, which if the SD drill is ommercially sucessful the whole permit will re rate.
Foregetting every other holding they have (FP, Bongo, Bowtie etc) then on the risk/reward ratio just for SD... the answer is yes I would invest at todays prices, even knowing the history of the company. The risk/reward is compelling. However it depends on your risk appetitite as it is certainly a company where you could potentially lose the lot and at the very least there will be more CR's along the way.
Its about ones considered risk ratio (to portfolio) and timeframe (short/med/long).
Rather be in than out, however theres probably a bit of time to get in as we don't even know when they'll get a test drill on site. I suspect thats why the share price is so low, people have moved money out whist we wait for progress on the test rig, once we have confirmation money will start to move back in up to and through the testing stage. Then its game on (or off?)
Just my thoughts
Cheers
Maddoc
VIL Price at posting:
0.5¢ Sentiment: Buy Disclosure: Held
