valuation on osh lng, page-6

mad et al

I did a different calculation but still came up with (and said yesterday) 100% to OSH's share price .. so around $13.
It goes like this:

The implied value of of the reserves sold in the deal with Pertronas(that STO gave in a presentation) was A$4.91/GJ (that’s $4.91m/PJ) which was even higher again than valuations resulting from the BG move on ORG. My rough numbers indicate that on the STO CSG valuation of reserves (Petrobas paid $2.55m for 538PJ reserves) OSH should be revalued upwards by at least 100% (even applying a discount due to it being PNG!!):

The PNG LNG project will commercialise 60% of OSH's 2P gas reserves = 2,800 Bcf (~PJ). At $4.91/PJ that's $13,750,000. Now although you need to discount this 1) because its PNG, 2) there's not a buy-in premium as Petrobas may have paid, the discount should not be too large as OSH is further advanced in that its in FEED and targeting 2013 for delivery whereas the STO project is in pre-FEED and targeting 2014.

And of course OSH also has 172 mbbl of oil in reserves and the other 40% of its gas reserves (1,900 PJ) and very large 3P and contingent resources.

So the LNG project alone is revalued by the STO transaction at over $13b and OSH is capitalised at $7.5b after yesterday's rise of nearly $1 and was $6.4b before that rise.

Add in the fact that rumours will swirl that STO has cahed in 40% of its LNG project reserves to cash up to have a go at OSH .......and its not hard to see OSH going on with its upmove .. although of course there will be down days on POO.

H