Surya Oil and Gas Corp (SURY)

[Go Pack Go]

I need a little help understanding the valuation of WDHI. As of Sept 30th, there were 50 million HNRC shares outstanding. Probably more now. They split the company in half to create WDHI. Frank has stated we will receive a stock dividend of $1.75 per share. If we are going to get one share of WDHI for every share of HNRC owned, that means there will be at least 50 million shares of WDHI. Or if WDHI stock is trading at $5.00 per share, we would receive 1 share of WDHI for every share of HNRC owned. At $1.75 per share and 50M shares, or $5.00 per share and 17M shares outstanding, that would yield a market cap of $83M. The current market cap for HNRC is $6.5M today. How does the math work that HNRC stock was selling at around $ .60 per share at the time of the split and 50% of the company is now worth $1.75 per share? Based on previous press releases, the combined HNRC will likely have 2022 revenues of $20M with a net income of around $10M. WDHI will probably have $10M in revenues and $4M in net income, which equates to annual earnings of $ .08 per share. Using a 10X earnings multiplier gets you a $ .80 per share price. WDHI is not a high-flying tech company. HNRC will likely have revenues of $10M and a net income of $6M or $ .12 per share. The energy sector is known for extravagantly high valuations. HNRC has plenty of potential with 83 wells to be tapped and the Cunningham acquisition still pending. But with all those positives we are still trading in the $ .20 - $ .25 cent range. How do the numbers support a $1.75 per share dividend?