I've posted 2 different valuation methodologies recently - one comparing BUL to QGC and the second on the basis of recent prices paid/offered for probable reserves of similar companies. Here's another angle:
BUL has 250PJ or 250 million gigajoules of reserves. At $10 per gigajoule, that's $2.5b in the ground. I have no idea what it costs to set up to extract the gas, but it shouldn't be too much, given BUL's favourable location. Let's say its $500m - that's a lot of plant. That's $2billion profit. Divided by 500m shares (assuming all options are excercised), and that's $4 per BUL share. Let's allow for a 50% discount for time value, and we still have $2 per share.
All 3 methods i've used have yielded around the $2 mark for BUL shares.
That's not allowing for anything else they find in their huge unexplored holdings, and that's not assuming any increases in the price of the gas (eg. it recently sold for $30 per gigajoule after the explosion in WA), etc.
Unless someone can tell me where i've gone wrong, I'm not selling for less than $2.
Comments please.
BUL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
