ebr could be 4/5 months away, page-8

moby float analysis ACTurtle,

I am totally, completely and utterly in disagreement with you on the value of the Moby float.

Moby is paying 3:1 for an offshore gas well.

Three to one !

They fund 100% of the drilling of Moby-1, to earn 35% of the PEL. Moby will cost $3.5m to drill, and according to the independant geo, has low/best/high numbers of 10, 64 and 154 bcf.

Forget California prices. In Australia, gas is worth NPV$1m per bcf.

Thus, if Moby hits, say, 40 bcf (midway between the low and best figure), the NPV$40m gets split Moby $14m, BSOC $12m and EBR $10m.

Moby will have 36m shares, so thats roughly 40cps, divided by 20 cent entry price, so you double your money.

BSOC dont appear to be listed.

EBR have 160m shares, so thats roughly 6 cps. EBR shares got a fraction more than 5 cents to buy right now.

If Moby misses, then Moby are in a whole world of hurt ; they will have barely enough left in the kitty to support one more throw of the dice with Lakes (who, frankly, are not one of Australias more successful E+P companies). I'd be predicting a price somewhere south of ten cents.

EBR, on the other hand, go 'ah well, Moby paid for it' and keep going with the gold and everything else. Probably drops to about 4.5 cents.

If Moby were paying a third for a quarter (ie paying for the well but getting a 75% interest), I'd think about it. But Moby are paying 100% for 35%.

No way in hell is any of my money going to support the EG Albers Provident Fund.

But I will think about some EBR shares, if they continue around 5 cents when it comes closer to drilling time for Moby-1.

Ian Whitchurch