Folks,Reserves are what you expect to recover at surface....

Folks,

Reserves are what you expect to recover at surface. Eventual undiscounted revenue will be oil price x reserves. Undiscounted value will be revenue less operating, capital expenses and taxes.

So from point 3 of oilman's calculations, if you believe oil is worth $40/stb (accounting for opex, capex and taxes) then the 2.5million stb is worth $100million.

Note that if the reserves above are gross values, then you also have to consider ITC's net working interest of 40%. So value to ITC is $40million - based on your assumptions (that I don't neccessarily agree with).

Cheers
Cockles