Morocco Valuation10 Aug 2023 15:29
Posted below by me 2 weeks ago in reference to MEM’s valuation.
Please note MEM now values each initial Tcf as £3.20 as opposed to £4.00 due to the revised shares in issue.
‘Just looking back over a few posts trying to find some info on possible valuations of what we may have in Morocco.
My very conservative, personal current thinking is we have 2 tcf.
MEMs post below is from 29th June 2023.
‘’Evening, I have put together something that might help a few people understand our possible future valuation as it is not the case that as we discover more and more gas the value will increase in a linear fashion.
Some will agree that a base valuation is 0.4p per Bcf or 400p per Tcf, what is harder to understand is whatever gas we discover after 3-4 Tcf will be worth less.
The reason is that a ceramic factory will pay a very reasonable sum for fairly small amounts of CNG, however once we have found sufficient gas to extract above the sales requirements to local suppliers, we will sell the gas as G2P or G2EUR at much reduced sums.
Hence the figures below might be of some use.
Assuming 490m shares and flat rate (no discount of 400p per Tcf)
1 to 4 Tcf . full value - therefore per Tcf =400p
5 to 8 Tcf - apply a 50% discount
8 to 12 Tcf - apply a 65% discount
12 to 16 Tcf - apply a 75% discount
16 Tcf and above apply a 80% discount
If we found 10 tcf the value would equal approx £27 per share or an M/Cap of £13 billion
However PG has stated his intention is to create a CNG business and sell off the rest.
So now assume we initially only discover 4Tcf and sell off the balance of the field, keeping Stub equity.
Some rough estimates indicate a likely Divi of 55p per share pa, if 15 Tcf is found and extracted over 20 years.
Not everyone/anyone will agree with my figures, but it sure is interesting playing around with the variables to see where we might be.
MEM‘’
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