As we now have FDP and are getting closer to drilling (possibly...

As we now have FDP and are getting closer to drilling (possibly beginning even next month), then FID is just around the corner and therefore we can start thinking about converting some of those juicy 2C's into 2P's.

Having looked at the last presentation it looks as if Gazelle has somewhere close to 15m barrels of oil and a further 260bcf of gas, all up around about 52 BOE. Taking RIA's 85% this reduces to around about 44m BOE. Its not far off that this could potentially be booked as 2P reserves and valued as such therefore I decided to be very unscientific and just take todays market cap and see what valuation the market has of the 2C's for Gazelle alone. $260m / 44m = $2.87 / boe.

Just on that basis, over the next 6 months, surely once these resources are converted to 2P reserves then this would justify a valuation of north of $2.87 / barrel. I would think somewhere around $7 would be fair, before you even start to add anything further in.

There is additional contingent resources of 50m barrels of oil (mainly Bubale and Addax) and another 140bcf of gas (split over Hippo and Bubale) before you even get to the exploration component of CI-202 (including Chouette due to be drilled soon), Accra (if it ever gets assigned) or WA399-P.

At $7 for 44m boe, this would value Gazelle alone at $308m or around about 85c / share should there be no further dilution. I'd be very happy with somewhere around there following FID.

On an overall 2C base, we are currently valued at about $1.38 / 2C BOE.

It will be a busy year for RIA for value driver news rather than the fairly lacklustre 2011, so hopefully traders will not lose interest as they did in 2011. What with a drilling campaign in CI-202 due to start in a month or so, AIM listing still to proceed with, potentially an Accra drill later in the year, maybe a drill on WA-399P too and then a further drilling programme on CI-202 due towards the end of the year, theres plenty to keep the interest up this year.