imo not only will we soon hear that we've got the $8.5M for VM, but we could also hear about either of these other land-based deals getting done.
what's the profit potential like for VM?
to make the math easy, we'll assume we give up half of the oil to a partner.
if we hit the flow rates anticipated, which could be as high as 2,500 boepd, then that's 1,250 X $95.76/barrel = $120K per day, $43.8M per year, for revenues. again, to make it simple, let's take a full 50% of that and toss it out. this accounts for inactive days, and various expenses. the "costs of production".
so that means if we just got half of VM-179, and then only kept half of those already discounted revenues, we'd still have about $22M a year in net profit.
let's say the OS, which is now 96M goes up to 150M. here's how the earnings per share would shake out:
22/150 = approx .15 per share EPS.
if we value ourselves with our peers, most companies like this trade at a 15 pe ratio, so .15 X 15 gives you a target pps of $2.25 a share.
now, remember the other deals? let's say we can get 400 boepd out of d-bar and south texas combined in the first year of reworking wells. this seems pretty conservative to me.
that's another $38,000 per day. about $14M per year. take out half. $7M per year, net profit. 7/150 = .05 eps... X 15 pe ratio = .75 per share.
so adding up the $2.25 and the $0.75 gives us $3 per share for VM, d-bar and south texas. this is only after the first year. production from the land-based leases should continue going up, maybe as much as 1,000 boepd from just d-bar alone, but that will take longer than a year to produce.
the wild card -- what else do we have cooking besides these three deals?
for now, i'd say a $3 target is good enough for me. that's a 100 bagger from here. jmho. everyone should do their own calcs. let's compare!