I went through the exercise in checking the NPV10 for proved developed reserves only on a few companies. The rationale being that at these prices, further drilling is not economically viable and therefore undeveloped reserves will not have any NPV10 value.
So looking at Developed Reserves (PDP + PDNP) , NPV10, we get:
AOK: 2.6 MMBOE, $65 million
AKK: 1.7MMBOE, $22.32 million
LNR: 8.2 MMBOE, $248 million
SEA: 7.0 MMBOE, $213 million
I appreciate some of these reports are now old, there have sales and purchases by some companies, and there has been alot of drilling by some companies. However, its the best numbers I have.
If undeveloped reserves are given no value in upcoming reports, the NPV of many companies is significantly lower than the current EV. This will be further exacerbated by recalculation of the NPV at lower oil prices, and production of hydrocarbons causing reserves / NPV to decline further.
My conclusion is that most oilers are still significantly over priced and the sector has a long way to fall even if oil process stay where they are. The slew of reports will likely use the SEC pricing to put the best face on things, but it will only give them a 12 month reprieve at best.
AKK Price at posting:
4.4¢ Sentiment: Sell Disclosure: Not Held
SEA Price at posting:
47.0¢ Sentiment: Sell Disclosure: Not Held
SSN Price at posting:
1.0¢ Sentiment: Sell Disclosure: Not Held
LNR Price at posting:
18.5¢ Sentiment: Sell Disclosure: Not Held
