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...........$152
$35bn Dick - thats a nice thought! Prob need oil at $150/barrel for that to happen...:-)
"However this is carved out between JOG and others wanting to buy into the action seems to me to be incidental, given that the market, in its wisdom, thinks the whole lot (excluding cash presently in JOG's bank account) is worth about $35bn. This is about 1.75% of what JOG's directors would say a lot of detailed and skilful work carried out by any number of experts points to it being worth"...........
........... $35m, not $35bn.
If it was $35bn I'd definitely have sold a few.................
Not sure what was in my last post that suggested I was losing my cool, Abatt. I wasn't. Everyone is free to express their opinions. I expressed mine after Herron had expressed his. It's up to him what he thinks will happen and he might well turn out to be right - or at least closer to what actually happens than my research and experience suggests to me is most likely. I'm working with the same info as all others, although it's probably fair to say I have a better handle than most on business valuations, particularly DCF modelling providing the means to calculate NPV, which isn't well understood by most.
NPV is about future net cash generation, discounted back to net present value. In a sentence: what all future net cash generated by the estimated 2C oil resources JOG owns and claims to understand how to bring to the surface (so to speak) in the optimum way would amount to - with the net cash so generated being measured using today's buying power).
That number (JOG's NPV) is probably now of the order of $2bn, the latter being AFTER incurring the capital spend (est ÂŁ1bn) needed before the oil (and some gas) is produced. However this is carved out between JOG and others wanting to buy into the action seems to me to be incidental, given that the market, in its wisdom, thinks the whole lot (excluding cash presently in JOG's bank account) is worth about $35bn. This is about 1.75% of what JOG's directors would say a lot of detailed and skilful work carried out by any number of experts points to it being worth.
Seems to me there enough give in the numbers to make possible some kind of deal most shareholders would be happy with. We'll know soon enough. The worst case scenario (as I see it) is if no deal proves possible and JOG decides just to offer the 2C resources (190MMboe) and the prospects (220MMboe) for sale to the highest bidder. Pick a number. Does it come to less than 20 cents pb?
Imagine the effect a discovery of 190MMboe of 33°API in the CNS would have on the market's value of a mid-sized E&P co listed on AIM - backed up by drill-ready prospects in abundance. But for some reason it doesn't count where JOG is concerned. Is it their PR? Or past record when it comes to disappointing shareholders with its drilling activities? The sector generally is out of favour but surely not to the extent of valuing discovered resources, with all the research done on how to land the oil in the most efficient and eco-friendly way, at 20 cents per barrel?
Supply and demand sets a company's share price. I'm not sure where all the supply is coming from, or why shares are being sold when they are. Doesn't make sense to me but wdik? People are entitled to do what they want. I've done my best to explain why I see things as I do, but it's fine by me if others know better. It's their money not mine to do with as they please.
I have an unusual appetite for risk and this has cost me occasionally in the past. But it isn't half fun when it pays off.
PC01
You appear to have interpreted my comment as a suggestion that current price oil will have no bearing on the minds of those who are interested in buying into this project. To answer your question, I acknowledge that the return to $75 from the low will certainty improve JOGâs position. If it was still $50 or below, I think they would have great difficulty in attracting a partner.
My point is that the most important thing for any party considering investing in this project is what the oil price will be when production starts and going forward from there rather than what it is now. No revenue will be made between now and then whatever the price is. The consensus view is that poo will continue to improve but nothing is certain as the events of the last eighteen months have shown. In fact, if the oil price were to rise rapidly to new heights what might be the consequences. This last downturn has forced out a lot of marginal production including US shale. How much of that might be brought back if prices return to $100. Furthermore, a rapid rise to $100 could easily be followed by a correction and I would prefer so see a steady continual improvement.
The suggestion by Herron was that $100 âwould tip the balance on an investment decisionâ. Personally, I hope that getting to $100 will NOT be a prerequisite for an investment decision and that the current price along with the prospect of a further steady rise should be enough to attract a partner or partners.
Let me ask you a question Dive - Mr Benitz is - I imagine - speaking to a variety of different and interested parties at the moment in the hope of securing a deal that will irreversibly change the fortunes of his company, his life and the lives of a few of us who have raided the depths of our piggy banks. Do you truly believe the value of Jog and all its assets are in no way affected by the move in oil from $20 at its lows last year to north of $75 yesterday? A carbon neutral $30/barrel cost producer with the most unbelievable gearing is doing the rounds when oil is heading into its first ever period in history when demand will outstrip supply. Yes the first time ever. The risk for oil is not that it gets to $100 but that it doesnât stop there.
Whether or not Brent reaches $100 this year is of no great significance. Production will only start in 3 years time earliest and it is a question of what the price will be then and following on from then that matters.
Hi Dick, you are a very positive exponent of JOG whereas I have stumbled into this for reasons of which you are aware. If the oil business was as simple as taking as word the "predictions" made by advisers no matter what their reputation, then this would have been done some time ago. But the facts are that, as I understand it, there are numerous issues to address to actually turn the black stuff into gold. I am simply saying that if the price can move through the $80 level, then momentum may indeed take it on towards three figures and make the case a lot easier to sell. Even in the world of oil cos the numbers we are talking about here are only going to be signed off at the very highest level and an interested party will no doubt be expecting the government to subsidise the rig electrification costs. I am hoping that the government will see that extracting the remaining oil from an existing well with an electrified rig is a great story for them to support. For the record my holding is down to just 10K shares.