PCHU - no point in posting that. There are many methods for deriving risk adjusted valuations, that is probably not the one they use.
Here are some additional points that i think are imperative
1) The most widely accepted is Discount Cash Flow valuation. A lot of analysts/instos will not even bother with any other form of valuation. Because we have absolutely the faintest idea of CF from Canada, that valuation type cant be used, so this valuation from MPO will largely be ignored
2) Any oil/gas analyst worth their weight will put only zero to very small valuation on exploration upside. You simply get egg on your face too many times if you value exploration upside at this early stage. The best valuation technique at the moment would be simply value it at the price we could currently sell the tenements to other companies. You would have to ask them what they would potentially pay for it to get any idea.
3) All risk adjusted valuations (including DCF) require you to discount your valuation by some arbitrary figure. This denominator is carefully calculated but the end of the day is just a guess
MPO Price at posting:
41.9¢ Sentiment: ST Buy Disclosure: Held
