Magellan Petroleum Corp. (MPET)

[RReaper]

New CEO buy-in values MPET at $1.21

From Bloomberg (http://www.bloomberg.com/news/articles/2016-08-31/ex-cheniere-executive-meg-gentle-rejoining-souki-at-lng-venture):

"Gentle, 42, was named president and chief executive officer of Tellurian Investments Inc., a firm established by Souki and former BG Group Plc executive Martin Houston to develop liquefied natural gas projects, according to a statement Wednesday. She will invest $10 million in the company for a stake of about 7 percent and will remain CEO after its merger with Magellan Petroleum Corp., a transaction expected to close in the fourth quarter, Souki said in an interview before the announcement."

That's $10m for a 7% stake in Tellurian, valuing Tellurian at $143m.

MPET shareholders will own 5% of the combined company after the reverse merger (see: http://www.magellanpetroleum.com/media-center/press-releases/detail/371/magellan-announces-strategic-merger-and-enters-the-lng).

5% of $143m is a $7.14m valuation for MPET. With 5.88m shares outstanding (according to Yahoo Finance), that's a valuation of $1.21 per share.

Even if we are to believe the new CEO was allowed to invest at a small discount (which is possible), Tellurian management themselves don't seem to be placing a high dollar value on MPET. Somewhere south of $1.50, by my math.

Anyone see a flaw in my calculations?