value investors6 Dec 2017 15:22
The title will automatically exclude all those selling JOG shares at present levels . plus those who don't consider what the companies they're investing in might actually be worth - most wouldn't be able to work it out even if they were told how to. It would seem the price is all that counts to many who post on here. There ware about 60 posts made on here yesterday - not a single one addressing any of the subjects it would be normal to see discussed on a forum such as this. I think my favourite went something like: "3% up at the mo" - stunning in its analytical content, It took a while to decide though - any one of about 40 might have won.
Anyway, enough of all that.
Please consider the following and discuss if you think it's worthwhile...............why not also discuss JOG's options moving forward and which direction/s people would like to see it move in? Do people want to see JOG tied to Statoil (as operator of P2170) for the next 5 years at least - at some stage being required to find 18% of the infrastructure cost to allow the oil to be accessed?
At the current SP of 174p the market values ALL the oil JOG owns in Licence P2170, which is made up of Verbier, Cortina and Meribel, plus everything else JOG owns including its management team and all the knowledge and expertise they have acquired and offer shareholders here, and including cash of �25m, at �38m.
This means the oil in P2170 is given a total value of �13m. Management recently estimated that the minimum value that should be attributed to JOG's P2170 oil is �80m and the maximum �428m. Taking the bottom figure (I am working on a net assets basis of valuation - broadly what the assets would fetch if sold off now in an orderly sale process) the current share price could be taken to be 300p short of fair value and at the maximum value 1880p short.
Why has this happened? Because the 'don't knows and don't understands' determine short term share prices by establishing the short term level of supply and demand. Clearly there are presently more sellers than buyers. We all have different views on who would be selling at today's prices and why. People who are forced to would be no,1 in my book, followed by those jumping into something that's caught their eye because it's REALLY good value - eh, jjga the FCA? - like UKOG or FRR perhaps.
You won't find Schroeders, Legal & General, the directors and other significant holders, or indeed me, dealing at these prices except to add as and when funds allow and it seems wise. As BB points out, depending on personal circumstances, there is a level at which one questions whether the absolute amount of one's holding should be increased further, but who's counting? Balanced portfolios are always recommended but they're no fun.
Today's price might look a bit silly in the months ahead.............
dyor