Friday, November 06, 2015 5:33:37 PM
Do the math...
A find of 60M barrels, with ERHC's share at 35%, and valued at $20 per barrel (after all, there will be a pipeline running through their block) would value the stock at $14 post split if there is no follow-on dilution.
60M * 35% = 21M barrels
21M * $20 = $420M market cap
$420M / 30M post split shares = $14
In reality the stock will run well beyond that number on the speculation that many of the other Kenyan prospects hold oil as well.
Another way to look at it is Addax was sold for $10B with 450M barrels of proven. If ERHC can find one third of that (150M barrels, their share), the company would be worth $3B. 30M post split shares would be worth $100 each.
The question is how much dilution we will face post split. If they can keep it to a minimum, which their buying suggests is the plan, then those that bought dilution insurance will make out nicely... there's that word again, IF.
A find of 60M barrels, with ERHC's share at 35%, and valued at $20 per barrel (after all, there will be a pipeline running through their block) would value the stock at $14 post split if there is no follow-on dilution.
60M * 35% = 21M barrels
21M * $20 = $420M market cap
$420M / 30M post split shares = $14
In reality the stock will run well beyond that number on the speculation that many of the other Kenyan prospects hold oil as well.
Another way to look at it is Addax was sold for $10B with 450M barrels of proven. If ERHC can find one third of that (150M barrels, their share), the company would be worth $3B. 30M post split shares would be worth $100 each.
The question is how much dilution we will face post split. If they can keep it to a minimum, which their buying suggests is the plan, then those that bought dilution insurance will make out nicely... there's that word again, IF.
People maintain anonymity for a reason and it is rarely noble.
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