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Trading BKP: what's your value if NEC's number is right?

Discussion in 'Shares' started by wdongli, 6th Dec, 2010.

  1. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
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    Perth
    sevencents77 in hotcopper gave out his assumption about the Enterprise Value based on his understanding of the oil reserve which shown in AEC presentation of E127 and E128:

    (wli: the number about the un-risked undiscovered original oil has been checked by reading ACE presentation on 19 Nov 2010. Thank him for his excellent and helpful assumption)
    ***
    Hi PeterN23,

    wli: use public information as base to get a honest but perhaps not right value calculation

    You asked for a response from the more knowledgeable, but Ill give it a go anyway. My estimates are based on a Ryder Scott report issued by PFC on the 19/11/2010 that is available to the wider market and no I am not privy to any inside knowledge or information.

    wli: Professional base for EV and his conservative EV calculation


    As far as Im aware Macqaurie use a $12 in ground valuation per barrel of oil and they would use P50 estimates which are 7.5Billion according to the ryder scott report p15.

    But firstly I will base my crude maths on only $1 per barrel and the P90 of 4.8Bb oil.

    (wli: P15 is higher assumption of the reserve than P90 but $1 would be very tough gound value too.)

    wli: EV range based on Professional and tough calculation


    4.8 bil x 25%(BKP share) = 1.2Bb oil x $1 in ground value
    = $1.2 billion. Now using 10% risk adjustment gives us $120 million divided by BKP shares on issue = 6.8cps. So based on Macqaurie $12 in ground value you get 81cps

    Now using the same math on the P50 estimates in the ryder scott report of 7.5 Billion barrles at my very low conservative $1 in ground value you get 10.6 cps and using Macqaurie $12 value you get $1.27 per share.

    wli: Summery of the calculation

    So to sum up I used $1 in ground value which is absurdly low. Brokers use around $12.

    P90 @ $1 = 6.8cps
    P90 @ $12 = 81cps

    P50 @ $1 = 10.6cps
    P50 @ $12 = $1.27 per share.

    wli: sevencents77 wants to be honest


    Crazy numbers when you consider brokers use around the $12 in ground value.

    Disclaimer: Please do your own research and I am not a financial adviser or qualified to give any advice. The above figures are produced from estimates available in the PFC presentation material.

    ***
    Not to be scientific calculation

    The above is to open mind and get a roughly figure to judge and decide what I should do and share the information only.

    Share price and the EV could not be taken as the result of science calculation. It should be used as a reference point for your decision.