If RBL isnt signed, texas money doesnt arrive then what? We dont have the money to realise asset value, what then? Sell assets? Or take over? Do you really think somebody would pay 500m for our assets given our poor cash position. It would be a fire sale situation and you would not see any of it the SP value.
500m or 11p a share is just as rediculous as 22p a share given current state of play.
Yes, but it is yet to happen or for the results to be seen, so until that point the market is probably valuing Trinidad on the figures we are currently seeing, which haven't exactly been great. As I've always said, Trinidad is what will underpin this - of course you'll get fluctuations along the way from any action on the more risky exploration plays - but i believe that if production rises significantly (without having to spend too much to do so of course) then it will underpin this at a much higher SP than currently. It is the lack of progress there that the market will have been watching and why this kept slipping, not the sideshows in places like Puntland and Guatemala. Just my view though and part of the reason I got out until they can show they've turned Trinidad around. ATB
If you are sure of those assets, going bust might be the best thing for shareholders? You stop PL's creaming dead in the tracks.
However, FD's valuation is oil in the land. NOT the land. Totally different. Different outfits have different costs to extract the oil.
Take my sweet shop example again. If I was keen on running the shop myself and work the hours, I might find it very profitable and do very nicely for me but if I was a national chain, I might not be able to make it work hence not interested. Same analogy here so we mustn't get carried away just looking at one set of valuation.
The key now for RRL is bottomline.....production. As I said last night, it is at a crossroad because of the $8m loan and Texas money delays.
If those monies don't come in and we managed to get bopd up to 2000bpd in 6 months (optimistic) then you are looking at 5b shares in issue! For a breakeven out fit.
Isn't that why we are introducing a waterflood program and eventually possibly fracking or horizontal drilling. The parallel with the US is significant, they too had old, unproductive wells that could not recover oil cost effectively using traditional methods, look at them now. The smart money for me is not in looking for new oil fields initially (that is for the future) but to focus on known oil established fields using new extraction techniques.
I'm no expert in oil exploration asset valuation, my field would be more towards aviation and shipping. Therefore I couldn't give a accurate figure, but common sense would tell me 955m is inflated and 50m is just ridiculous, so for arguments sake let's meet in the middle at 500m, 50% discount on the professionals view. Still leaves the SP NAV at 11p?
The point I was trying to make Fin, is that your comments we could go bust are plain right silly with such assets we have on board. Not saying it can't hit 1p as I said the sentiment has no connection with asset valuation, but it won't be there or around that price for long.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk!
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.