Interesting to look at recent broker reports on this:GMP (6th...

Interesting to look at recent broker reports on this:

GMP (6th Jan) = 18.9 cents.

"The first, spudded today, is targeting the Sunbird prospect,a 73 sq km, shallow, oilprone Miocene reef, where a 200 mmbl oil discovery could theoretically add 200% to Pancontinental’s market cap". Share price was 6.3 cents at the time of writing.

StockAnalysis (11 Dec) = 39 cents.

"StockAnalysis calculates that this large structure covering 73 km2 has potential to hold reserves of over 360 mmbbls of recoverable oil, but even discovery of 200 mmbbls would have a value to Pancon’s 18.75% interest of around 39 cents per share". PoS given as 16%.

Hartleys (5 Feb) = 133 cents.

"PCL and its joint venture partners have not released an estimate of the prospective resource contained in the Sunbird-1 target however our rough calculation estimates gross un-risked oil in place of approximately 800mbbls. A rough risked estimate (800mbbl x US$10 x 15% PoS x 18.75% = US$225m) values PCL’s share of Sunbird on a risked basis at 20c/share". So while not explicitly stated, the unrisked value would be 133 cents (20/0.15)

So the probability of success is similar (around 15% or approximately 1 in 7) but the potential value ranges from 19 cents (5 fold from current) to 133 cents (33 fold from current).

Probably wise to apply an exuberance discount to the last one and going halfway between the first two produces a figure of 30 cents (7.5 fold increase on current). This would be nice but given a 1 in 7 chance you could argue that it is pretty fairly valued at present (ignoring all other PCL prospects etc for simplicity).