Originally posted by spinefx
Chaps, great discussion.
I place no value on a Farm-out(not because it has no value), simply because I don't understand it, how it's done or know how the market will react to it. Also the timeframe is fluid.
Agree that there is "something coming" though, as discussed on another thread, the Bookbuild will be turned over, 30 mill days are not enough and to risky. Volume will come whether via news or constructed by the instos.
Winx though is a different beast, prospective oil resource is 144mmbo, should this play out, I apply a tentative $3bbl value to it, purely due to the fact it will prove an extension of the already successful Nanushuk play. Highly desirable area, as evidenced by the surrounding current and planned activity, Oil Search, Repsol, ConocoPhillips.... they all want more.
$3bbl, equates to over $400mill of value, based on SOI of 6.3bill, some rampant trading/posting(read, mine now) I envisage 6-7c.
That doesn't consider a Farm-out or Yukon.
When DW offered shareholders the Rights Issue, it was too reward existing shareholders for what is, a potentially transformational 9 months.
I'm more than comfortable with where we currently, after the disappointment of Icewine2v. North Slope conventional oil is a known entity and it has proven value, it should make us money in the next few months.
How's that for a ramp? Did I jazz it up enough?
Of course all the above are my opinions and should not be treated as anything other than my opinions/guesses/hopes/dreams.
Cheers.
Spiney, I agree with your points regarding valuing farmout at this point in time. I suspect it does carry some weight in our current market valuation, but perhaps not as much as Winx does, due to its imminence.
One note of caution to potential Winx valuation though...is that OSH paid in excess of US$3/bbl for proven reserves and contingent resource. The muli-year 19 well appraisal program from Armstrong/Repsol resulted in a discovered resource (gross) of about 500m bbls from a potential unrisked resource potential of 1.5b bbls (i.e about a billion bbls of prospective resource there). So about US$1.3 / bbl for total resource, with about 1/3 of that as 'discovered'.
Our total target is 400m (gross) resource, and it would be unrealistic to assume that a successful Winx-1 will unlock them all as being 'discovered'. However
if enough is 'discovered' (say about 1/3 or 130m bbls, gross), then the WB acreage may potentially have a valuation in excess of US$1 per bbl. Conversely, if the solitary well unlocks materially less than 1/3 of the potential, valuation would, I would think, be similarly affected.
It would then become a tactical (consortium) decision as to selling out at a lower price or investing further to unlock more value. Consortium partners could plausibly have different outlooks. For RMP this is their only game for now and the bang for the buck on a per share basis could be mesmerizing. For OEL, I wouldn't be surprised if they would see this as a means of partially exiting Alaska at profit for either direct shareholder return or reinvestment in GoM where they are actively producing as well as exploring. For 88e, it is likely just a means to an end....both in terms of financing the Icewine unlocking, and in terms of stepping up near term intrinsic shareholder value.
All IMO.
BTW....reference to some OSH numbers on their transaction and implied intent.
https://www.oilsearch.com/__data/as...on-of-interests-in-the-Alaska-North-Slope.pdf
(20min delay)
