Aurora Acquisition Corp (AURC)

[tr8dervic]

Book value is different from appraised value. Accounting rules mandate that assets are carried at the LOWER of cost or present value.

IE: A co spends 100 mil and finds 100 million barrels of oil. The true value might be 1 billion plus but will show on the balance sheet as 100 mil of book value. Or...

A co spends 100 mil and finds 1 million barrels of oil appraised at 10 million dollars. They would take an impairment charge of 90 mil and show 10 mil of value on the balance sheet.

In this case, I think the Russians were issued 90 million shares of restricted stock at 1.00 per share. Therefore I expect the book value of reserves to be in a range of 90 to 110 mil. Not sure about the Krylon acquisition.

Another example, the PV10 (Future cash flows discounted for taxes and depletion) of an oil co. might be 10 times higher than the book value of the reserves, but will not show up on the balance sheet. You generally have to dig for that info.

Clear as mud?