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Re: eom7 post# 8928

Tuesday, 05/03/2011 12:56:33 AM

Tuesday, May 03, 2011 12:56:33 AM

Post# of 17739
FECOF future revenue estimates


>
> FECOF .0275 Did we just get $1.4 Billion of Net Future Revenue certified by Chapman Petroleum Engineers LTD?
>
> Can you look at the 51-101 and let me know if I am correct here? TIA
>

I'm not Bobwins, but here's my read on the 51-101F1.

Page 3 states that at a 10% discount rate, the future net revenues is 1.4 million (not billion). This is consistent with the proved and probable reserves of 38,000 barrels of light/medium oil on page 2, and a net present value of 1.4 million (using 10% discount rate) in the lower table of page 2.

If I recall correctly, the total number of outstanding shares is roughly 220,000,000. This suggests that based strictly on a valuation method of proved and probable reserves, FECOF.OB's current share value is 0.66 cents/share. Since FECOF.OB closed at 3 cents/share today, the market is expecting upside due to exploration, or FECOF has other assets to support the 4.5 price-to-book value.

Disclosure--0.8% of my portfolio is invested in FECOF. I'm hopeful about FECOF's future, but I don't think the share price can move up much beyond the current value until the exploration upside potential is better clarified and understood by the market.

JWB

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