If we could get $3 per thousand cubic feet (or 1 BTU) for our gas per mcf, then we are getting about $3000 for each million cubic feet we have.
We have 300odd BILLION feet which has a very rough value of 300,000,000 which would be $1 per share.
The industry has projected roughly $5-50 as an average price over the next 2 yrs which would practically double that MAE value to almost $2 per share. Given that they buy and settle in US dollars, the exchange rate would take MAEs value beyond $2.
Now factor in the newly discovered MANCOS SHALE of which we have 3odd trllion cubic feet of 3P gas. If, as they have stated, 4% of that came good as 1/2P, then we have to add another hundred or so Billion cubic feet. So, if after the Independant Reserve Report is concluded we end up with twice as much 2P, say 600Billion cubic feet of proven gas, then we can double that last value, which would give MAE a $4 value.
Consider that a company that wants to make money wont pay that much (or they wont make money), lets say they [pay half...then MAE would be worth that $2 again. So its easy to see why everyones saying we are undervalued.
Now that is a simple and yet probably very underestimated value based on the parameters i gave for potential GAS in place.
When the expected rerating is finalised, it will effectively rerate us and value us for a takeover. We may not see those figures until very close to our first offer though, so dont hold your breath for the IRR, just buckle in for the next announcement.
*After reading this, pls read my disclaimer and apply it to my post
Cheers,
L.
MAE Price at posting:
36.5¢ Sentiment: ST Buy Disclosure: Held
