spot on calculation , not only because you came to the same conclusion as me, between 0.15 and 0.30 at best but because you don't just throw numbers of value as certain others. It seems our friends keep ignoring the loan they have to take to pay off BOW, it is there in black and white an of course the value of Kansas is highly dubious. just look at the writedown they have had to make on their previously stated value of Tapia. Some of us always knew these valuations were crazy but of course some people believed everything they were told.
The basis of your calculations are indeed sound, based on facts and the only argument we get from SIFC is that it is completely wrong. of course he is waiting for OBB and DP to help him out here, sure they will come along soon
Clear agenda on shorting this share for own ends - blatant calculation manipulation. Feel more sorry for 'Joe Punter' who panic sells on the 'fear factor'. For those interested take a look at APC - looks stonking good value at the moment - do your own research. Bit like PEG - although big uplift today still lots of value at current share price with large project pipeline.
Clearly has a connection to this UK consortium so therefore wants to use his shareholder vote to push through his "competitive offer" this is an opinion and I have no factual evidence but its clear. Its a shame I have to spell this out but unfortunately again being used by some on here to be negative and drive people to sell. Disgusting.
Well now the dust has settled a bit I think we can give a reasonable estimate of what fair value for the shares will be once the deal has gone through.
Sefton Group will own 20% of Tapia valued at $1.375m. There will be a loan of $3m against the whole of Tapia, so Sefton’s part will be worth net $775k.
In addition it will own Kansas oil production and pipelines, valued in the accounts at $3m. Also, it will be paid $3m over three years, funded by the revenues of Tapia, which in effect means Sefton is contributing 20% of this itself (as these payments will reduce any profit or dividend that Tapia would otherwise have made). So that gives $2.4m, ignoring any NPV discount, as there is an interest rate on top of this.
There is a balance of trade payables against trade receivables (or was at 31 December 2013) of -$1.055m, and a positive cash balance of $250k, giving a total real asset value of $5.37m.
With around 800m shares in issue this gives an asset value per share of 0.67c, i.e. 0.39p.
However, it is unlikely to reach this level as SP seldom reflects full NAV, and there has to be some doubt about the valuation of Kansas, as according to the RNS it is “essentially self-sufficient from production” i.e. at breakeven level only, and “requires additional capital to fulfil its potential”. In such circumstances the market is not going to ascribe full value to it.
In addition, SP of course theoretically reflects future earnings rather than NAV, and future earnings (after the 3 years of payments) will consist of a share of the Tapia profits and currently nothing else. Therefore the board has to invest in the pipelines and Kansas oil in such a way that a solid revenue stream appears in order for the SP to grow, which will take some time. Consequently I would say that if the market reflected fair value (a big “if” for AIM of course) then an SP of between 0.15p and 0.30p is likely for the next couple of years or until the Kansas assets can be shown to be starting to fulfil their potential.
Thanks Oilbe - like you always amazed at some peoples lack of financial scrutiny. I like you and possibly a few others, who can interpret figures that this is a no brainer to make a few pennies for doing absolutely nothing.
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