Plugged the price yesterday (18.5cps) into my EXE valuation model. Full dilution including Chinese options at 19cps. Upside is now around 4.60 times against yesterdays price (i.e. 18.5cps). As part of the overall risk discount in the model, I have a small risk weighting (5%) for Chinese approval. Once Chinese approval is received upside moves to around 5.40 times yesterdays price. My model returned a 73% conviction (does not take into account qualitative issues - quant only) to buy yesterday. This indicator plus the strong qualitative characteristics of the company (board history, vision and planned synergies)was enough for me to top up again.
As an aside, IMHO the price will not effect whether CNOOC exercise their options or not....only the drill results.
Exciting times ahead.
Please DYOR as my valuation techniques and my industry/economic opinions may differ significantly from yours.
Love puff
EXE Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
