No confidence in Tap's Independent Directors, page-19

The independent Directors are going to refer any queries to the independent valuation. In theory, BDO are the experts and this sounds reasonable. BDO in turn will refer to the info that was given to them and to their declarared assumptions. Incompetence is almost impossible to prove and generally subjective, so the valuation model should rather be questioned as this is the root of the matter imo.

Simple assumptions such as the current FX rate used of .76 and projecting the A$ to strengthen influence value. Changing this to .73 increases recommended fair value to to 9.47c/share.
Similarly the brent price outlook. Assumed to be U$72 and Dubai crude at a $3 discount. Reasonable or not? Probably, imo, but highly subjective.

BDO ring fence the value of Manora 2P and 2C to a total of A$36,5m. TAP's other assets are valued between A$8,9m and $16,5m and it is declared this excludes any value being attributed to the $70m franking credits. The 9,1c recommendation uses the A$8,9m figure. It is also stated that RISC have allowed an additional US$8,2m above the TAP provision for future well abandonments. Have TAP management got this number wrong or are RISC being conservative? This is a material provision and should be considered imo and could increase stated fair value by another 20%.

Lastly it is stated the valuation is based on TAP financials to 31 December 2017 and management accounts to 30 April 2018 and that TAP have advised BDO there were no material trading abnormalities which need considering prior to the valuation date of 10 July 2018. Would an update with new lifting numbers and cashflows change the valuation much? Too subjective to provide a definative answer unfortunately.

TAP is not without challenges, particularly with having 2 shareholders owning over 50% of the company. For one however to gain control, it must be worth a premium - imo. Not keen to sell below 13c but will do so if control is obtained by either party.