I agree, impact, that a project finance valuation is appropriate because that is what it is (at the moment): a project in a corporate shell. NPV works for me too.
But where a company is constantly replacing projects so that there is an expectation of growth of earnings out into the indeterminate future (such as will be the case with the oil giants), then the classical corporate earnings model probably works.
What doesn't work too well for me is the defined method for valuation: what's this 80 acre nonsense all about, for instance? Not AUT's fault or NSAI's - they're following the rules. One size fits all might work for comparatives between companies but it must result in universal mis-valuation of all. Fat lot of use that is. The area drained by a well depends upon the permeability of the rock (and possibly the degree of fracturing) and the planet just does not conform to their standards.
sorry about the rant.
They've not put anything in for the Austin Chalk even though there is more than 12 months' flow from Weston.
AUT Price at posting:
$2.83 Sentiment: Hold Disclosure: Held
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