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Interactive Investor has an "estimate of fair value" for AEX at 2.80p .
I ve found these to be conservative so would suggest the SP still has a long way to go to get somewhere close to its value. Good to see we are holding at this level building the foundation for the sustained SP increase on the next FEW tranches of news.
As momentum builds usually overshoot targets or targets get revised up imo
2.8p based only on 1.8TCF
We now have an estimated 16.38TCF
Fair value should therefore be:
16.38 / 1.8 X 2.8p = 25.48p
Agreed.
But the 16tcf is a bit of a way off being proved up.
8tcf is not. That is Ntorya, according to Ara. Imminent (!). CH1 might do it.
8 / 1.8 X 2.8p = 12.44p
25.48p?! Well maybe one day, when the assets first get "proved up" and then, later, once de-risked; timescale? 5 - 10 years plus maybe.
Yes edgar, 8TCF far more reasonable but still need appraising..... lot's of drilling to be done to tick that box.
For those that don't understand what 'fair value' means, it is the value of the company based on what it has in hand today, it doesn't refer to ANY proving up or appraisal, that would be called a "TARGET" whereas 'FAIR VALUE' refers to how much the company should be valued at TODAY.
1.8 TCF made the fair value TODAY to be 2.8p per share.
We now have an estimated 16.38TCF, or 8TCF if you only look at Ntorya for the FAIR VALUE TODAY.
Fair Value:
“Fair value accounting refers to the practice of measuring your business's liabilities and assets at their current market value. In other words, “fair value” is the amount that an asset could be sold for (or that a liability could be settled for) that's fair to both buyer and seller.”
https://gocardless.com/guides/posts/what-is-fair-value-accounting/
“Fair value accounting is the practice of measuring a business's liabilities and assets at their current market value.”
https://www.investopedia.com/terms/f/fairvalue.asp
Current market value has nothing to do with appraisal or proving up anything.
"Current market value has nothing to do with appraisal or proving up anything."
Except in so far as those assets will have next to no value until they have been proven to have a value. Ity is fully known that the recent estimate in GIIP for the Ntorya region might now be 8TCF and that the wioder Ruvuma area might be 16TCF, so why does the Interactive Investor NAV you referred to earlier only quote a figure of 2.8p? Well because the estimates above are currently estimates and as such have minimal if any value, whereas the 1.8TCF referred to has already been appraised and therefore has been assessed as having a value. Until the 8TCF and the subse
Sorry..... Until the 8TCF for Ntorya and the subsequent increase to 16TCF for the wider area has been appraised it will never contribute much by way of value to the perceived NAV.
So mctripe you are correct, the "assets" in the ground do not need to be appraised to contribute to the NAV but, until they have been their value and hence their contribution to the NAV will be next to nothing.
Crusty the 3.45 Tcf in the (high confidence area), thats the area associated with the reservoir sandstone encountered at NT-1 and NT-2. So 3.45 tcf which has already been proved up by two wells NT-1 and NT-2 but also now by the 3 D seismic which has more clearly defined those volumes.
As I'm understanding it once development licence is issued then RPS Energy will not only be confirming the volume/figures but will be reclassifing them from resource into 1p 2p reserves, which should effect the means by which Aminex is valued.
"The interpretation of the 3D seismic has been completed by the Ruvuma PSA operator, ARA Petroleum Tanzania (APT). Seismic inversion geomodelling, undertaken in collaboration with Ikon Geoscience, has defined a high confidence area with a revised in-place volumetric estimate for the Ntorya gas discovery. A most-likely (approximating to P50) estimate of 3.45 trillion cubic feet (Tcf) of Gas Initially In Place (GIIP) is now believed to be potentially connected to the reservoir sandstones encountered in the Ntorya-1 (NT-1) and Ntorya-2 (NT-2) discovery wells. This revised Ntorya volume represents a substantial increase to the published P50 GIIP of 1.64 Tcf estimated by RPS Energy (RPS) in their February 2018 Competent Person's Report (CPR)."
Then when CH-1 is drilled, and if successful in proving up the (shallower sand unit (Unit 3) then a potential further 4.5 TCF reclassified by RPS from resource into reserves. Yes all mind bogling figures
"Furthermore, the new 3D seismic images a possibly even larger area of gas charged reservoir sandstones, beyond the high confidence area established by the new seismic inversion modelling. This provides for potential additional prospective gas volumes associated with the Cretaceous age sand units tested in NT-1 and NT-2 (Units 1 and 2) and for the possible existence of an as yet undrilled shallower sand unit (Unit 3), to be tested by the forthcoming Chikumbi-1 (CH-1) appraisal well later in the year. An upside aggregated GIIP volume for the Ntorya accumulation based on a success case in multiple stacked sands at CH-1, is estimated by APT to be up to 7.95 Tcf (approximated to a mean unrisked P10 GIIP)."
Where is license?they said Tanzania gov sign off already.i wonder if someone can send pan to them to sign it with brown envelope.😀
Yes I would agree with you BG they will be ascribed an increased value to those areas that have been appraised and yes I would expect to get the value for the full 3.45TCF. Will NT1, NT2 and, eventually, CH1 be considered sufficient to have "proven up" the whole Ntorya area and the new possible figure of 8TCF? I don't know to be honest but I would be surprised if so. Will we get any more clarity from the CPR? I doubt it as the CPR was initiated before the coming drill for CH1 and hence cannot include any of the new data.
My point though being, to counter stockcheque's assertion, is that having a GIPP estimate, in and off itself, does not immediately add value to the NAV; only through appraisal of the resource can those estimates be proven and thereby attributed a value. Look at the process that AEX has been through with Ntorya to get to where it is today. And even now that "proving up" has not been fully completed (though close, thankfully). The completion of each incremental stage adds "value" - initially minimal value and eventually optimum value but then ,a s we know even that does not translate 100% into the NAV because of various risks involved in getting those assets out of the ground. Risked NAV versus unrisked NAV.
So to suggest that our NAV is about to balloon because of the 16TCF attributed to the wider Ruvuma acreage, is more than just a little premature methinks. Will we soon see the "value" of the supposed 8TCF (or what it eventually proves to be in the CPR) attributed to the Ntorya basin in our reported NAV - yes very likely but what will the unrisked figure be and will that figure be for the whole of the Ntorya basin without further appraisal or will that figure only be fully reflected after further appraisal drills (certainly for those new "sand layers"). I would expect it to be a gradual process and I doubt the CH1 drill will be sufficient on its own.
Must dash BG - I have a call to make and then a train to catch.
Oh sorry BG "(or what it eventually proves to be in the CPR) " - should have read - (or what it eventually proves to be in any future CPR)
Bye for now.
Fair value, as I have proven already, is the value today for the company, it is what you would expect the company to be valued at with no further enhancement such as proving up resources.
The old 2.8p valuation as we know, is based on the old resource figures prior to ARA taking over and doing 3D Seismic.
The 3D Seismic shows a massive and massively increased resource over the data used to value AEX at a fair value of 2.8p. That is what makes Aminex fair value today much higher than the old 2.8p, the proved is much higher, the possible is now astronomical, the median and mean are staggering, plus a mahoosive amount of condensate, that is what the fair value would be based on if a bid came in for the company today, it would not be based on any future work to prove up the resources.
P90 7,405 BCF (Proved)
P50 15,214 BCF (Median)
P10 24,572 BCF (Possible)
MEAN 16,385 BCF
Condensate 55.2 MMbbls
Screenshot of the data table from the ARA 3D results.
https://ibb.co/WsNrzLt