market value for 400bcf

Hi there,
Posted this on another forum, thought I would share it here.

Once they have proved up the inground resource to say 400BCF, the market could put a valuation of anything from 35c to $2 per mcf, which is the same as $350000 to $2000000 per proven inground bcf. (1000000mcf in a bcf)

e.g. 400BCF = $400,000,000 value -> split over the partners and spread into the shares.
(at $1 per mcf).

$400,000,000 * .1275 share of operation = $51,000,000

$51,000,000 / 62,300,000 shares = ~82 cents per share. (not counting options).

or (with options)

$51,000,000 / 98,000,000 shares = ~52 cents per share. (counting options).

Just trying to get a clear picture in my head - there is lots of different info floating around...

If the basic maths is ok, then it comes down to (using 98million shares on issue, including options)

cps = 0.045 * BCF(inground proven) [ for 35c/mcf)
cps = 0.13 * BCF(inground proven) [ for $1.00/mcf)
cps = 0.26 * BCF(inground proven) [ for $2.00/mcf)

taking a mid range of $1/mcf and different discovery levels gives -

400BCF * .13 = ~52cps
800BCF * .13 = ~104cps
1200BCF * .13 = ~156cps


That looks like the fundamental maths to me, who knows how the market will see it...
(Let me know if any of the above is wrong - it is different to both Hartleys and Strachan, but they are doing risked evals, or whole resource values).

It all comes down to the risk over the next few weeks tho, and if the trap is sealed (dont know where they got 10% from - Hartleys say it is high risk, but then also say that the seismic has good indications of a seal, and there is HC below).

All the best.
cheers
MD