Current earnings ~ $1m/month $12m/year, what are costs? If it all goes to b/l (e.g. marginal cost), ~ $12m, M/C $120m, or £98m. Current £66m. How much of the current KN income is clear profit? We obviously have some issues here because it doesn't run as an operation on its own, funds supporting NT2? However NT1/NT2 are clearly transformational (e.g. prospective 1100 BCF versus 28 BCF current). How are valuations being arrived at?
If we were fully valued for the full potential on the estate, the price would be about $7 per share. However, there are risks on the estate and we extract over time. Has someone a model for how much gas we can prospecticely extract and how that translates to monthly or annual earnings over time?
If, for example, we could ramp up to $40m/year profits, probably supports an S/P somewhere in the 8p range. Those are good multiples but they are not necessarily crock-at-the-end-of-rainbow-material.
Not at all intending to rain on the parade here, just to get some understanding of the realistic annualised earnings potential and resultant prospective PE.
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