Be careful of using the 16m pay and just multiplying things by...

Be careful of using the 16m pay and just multiplying things by 10. The 16m is only for Killanoola-SE1. This is a separate structure to Killanoola-1, which has 6.5m of pay in the DW1 well and this can not be changed based on analysis of a different well. I made some assumptions that the two structures are the same size, and it works out to ~2.5x increase in reserves. I'd also like to see some proper well logs showing this 16m of pay versus the old 1.5m, it seems odd to have such a large jump.

I don't like using high side numbers as they are usually unrealistically high and in this case also include Killanoola South (undrilled prospect). I prefer the Beach P50, which would move from 3 million to 7.5 million barrels. I think the 40% recovery is very optimistic, but give them some credit to improve on the 18% and round it out at 2 million barrels recoverable. With a rule of thumb of 1BCF = $1 million to MC, this translates to a worth of about $10 million in ground. Hard to give it more value until the new extraction methods are proven. If it can flow it could be a nice little earner for a small company, but the numbers in the last 2 columns of Verily's valuation spreadsheet are crazy and flawed (the BOPD does not increase with reserve size, nor does the initial reserve size change with 1 versus 3 production wells).

Add a ballpark $50-100 million for in ground reserves at Flax/Yarrow (which I have not investigated and don't know if there are any issues with producing), and there may be some value. But it isn't hugely undervalued at this point in time based on the reserves they have. Need to bring some production wells online and some exploration success (very difficult to achieve) can provide a further boost. ROG has some nice little assets that hopefully STO can help progress, just don't expect it to turn into a behemoth.