RE: Value of Barryroe stake?18 Mar 2017 08:33
ALGU,....It depends how it is structured,.. scenario(1) an all cash offer for Barryroe, or scenario(2) an all paper reverse takeover of LOGP,... I prefer the scenario(2) ,..... looking at what Brandon-Hill say, in their report dated 11 July 2016 (page 4) ;-
"While projected development costs have fallen substantially (at least in the short term), it is
likely that a more pragmatic approach is now required to secure a partner. This may consist
of funding one or two appraisal wells prior to committing to development and possibly
additional 3D seismic to expand coverage across the entire structure."
http://www.lansdowneoilandgas.com/wp-content/uploads/2016/07/160711-Brandon-Hill-Lansdowne-report.pdf
scenario(2);- Using T5 as an example,..if after their IPO, T5 were interested in a reverse takeover of LOGP (picking up the LOGP tax position), with the intention of Farming Out about 50% to 60% of the Barryroe stake, to a third party with deep pockets, then I would be happy with an all paper valuation of approx £9.03m to £10.03m for LOGP (s/p@1.77p to 1.97p approx), provided T5 paper was at the same discount to their existing assets, as PVR are discounted to their existing assets with the PVR s/p@17.7p approx (I did some calculations awhile back, based on an all paper takeover of LOGP by PVR).
Assuming PVR also Farmed Out about 50% to 60% of their Barryroe stake to the third party with deep pockets, this scenario of three envisaged partners, should be in a strong position to take Barryroe to next stage, without further dilution. (imo)
BW