In response - my valuation view for what it is worth.1) Longtom...

In response - my valuation view for what it is worth.
1) Longtom has cost a little over $400m to date but I dont think it is worth more than $300m. Pre the issues of the last year NXS nearly had 50% sold for $155m from memory.
For the sake of the discussion lets just say that Longtom offsets the debt, there is no substantial apparent VISIBLE upside - future drilling could disprove me but that is the nature of the industry.
2)Crux is the value driver, high quality reservoir and oil conservatively - at $90bl life of project, 11.5m barrels per year, AUD/USD parity, OPEX $113M pa (FPSO) +$6 per barrel, Capex $650m (bearing in mind that NXS already have bought and stored $80m of long lead items),circa PRRT $370m pa, circa Shell royalty $40m pa, less tax, at a 10% discount rate = project NPV for 85% is $790m net of debt or $0.60 per share.
3) Value upsides: a)at $110 per bl over project life adds $0.23 per share in NPV. b)above production profile is 80m barrels between 2014 and 2020, there is a remaining 3 year tail to produce additional oil if found (Auriga and Caelum highly prospective targets of 50m+ bls). At a $90bl oil price just a further 30m bls over these 3 years is worth $0.20 NPV c) Echuca Shoals has blue sky potential but indeterminable value.
In summary Crux is the value within NXS and it is substantial - however no substantive progress other than remedial contract activities has occurred in the last 2 years.
I have been criticised before on the following thoughts but I really dont understand why they didnt raise a further $30m 2 years ago and drill Auriga - it is a mature and low risk target within Crux that if successful could easily add 50m bls to Crux - which would have improved farm out prospects and $s received. Lets remember that NXS didnt discover any of these fields, they added value by appraisal drilling and they should have done it at these near field targets. NXS is an oil exploration company and has had a very loyal shareholder base - how many wells have they drilled in 2 years.
If they successfully farmed out 35% of Crux for $200m or so then the SP would gallop because they would unlock the Crux value. Hopefully RC will get it done.