62Strat's approach is the correct one. The $15-20 bbl in the ground is just a quick and dirty NPV value but it captures a lot of the uncontrollable variables. The components on recovery and working interest are more likely to be constants. A successful outcome will increase the prospectivity of anything else in the permit. (Nido have alluded to more than one other structure several times). At least one other structure is likely to be tested in theory by this well given the location. Nido have mentioned this in old briefings. You are not allowing for that in your guesses on valuation. They will be worth something. A large hit will make NDO and KIK clear candidates to be taken over. Good discoveries are hard to find. The register is quite open so someone will abitrage the value to put it in play. These people are in the exploration business they are not there to fully exploit the asset just drive the takeout price as high as they can. 62Strat's approach captures the value in the ground. Someone else will develop it.
NDO Price at posting:
14.0¢ Sentiment: None Disclosure: Held
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