Clearer picture now20 Sep 2018 10:38
Confirmed multi well appraisal programme de-risking upwards of a possible billion + barrels. Looks like the Chinese will be developing Barryroa in a serious way. My 50p target by 2020 stands.
Post appraisal assuming a success case PVR BR share approximately 280 MMBOE net audited 2P reserves This means reserves, net to BR is 280 million barrels of oil equivalent.
40% of 280 mmboe = 112 mmboe.
For the sake of round figures, lets say $10 profit on each barrel.
112 mmboe x $10 = $112b (£853m)
Conservative £853m x 60% (risk discount) = £341m
Given the warrants at 12p rep 10% Co,( I wouldn't be surprised to see PVRs share of BR taken out by the Chinese in some capacity in around the £300m mark) giving APEC a healthy return on each angle.., and setting TOR and the gang well on there way to an incentive bonus.
Based on a £300 MC Back of a fag pack approx 50p + range, 2 years.* IMO
As a comparison
Hurricane energy made the North Sea Lancaster discovery back in 2016- 650M shares in issue.
Couldn’t secure a farm out deal, decide to do a dilutive raise of 350 million shares at 10p each, MC £65 million at the time.
4-6 months later after success with the drill bit the market cap jumps to £400 million. Further raise of 200m shares, more drilling success and the market Cap is £650 million. 1.2 billion shares in issue. Own 100% of the asset, with a projected production of 17k-20k bblspd, now bring the field into full production, FPSO purchase and 1.8 billion shares in issue. 50p share price range.
Now the deal is confirmed, I estimate that PVR 40% share of BR will account for 14k bblspd* should follow a similar path to HUR
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