Just been speaking to Michael Caine down the pub and he told me,...

Just been speaking to Michael Caine down the pub and he told me, "Not many people know this but...

...in trying to value Oilex's Canning Basin holdings you need to go and research the deals in the area. Now, the LOWEST of these deals was in February 2013 - a deal between Petrochina and Conoco Philips which valued the Canning Basin territory at US$9.80 per acre.

And, if you look real close at the property held by Oilex you will see that they have 17,858 square kilometres of Canning tenements all to themselves. Well, I tell you, these oil & gas analyst kids today couldn't convert a kilometre to an acre to save their jobs but us oldies know a bit about these things and 17,858 sq kilometres is a bit more than 4.41 million acres.

So, if you take $9.80 an acre as the going rate, Oilex's property at Canning should have a MINIMUM value of 4.41 million x $9.8 or $43.21 million. Now, Oilex's market cap based on 617 million shares and a 3.5p share price is £21.6 million or $34.33 million. Strip out the $5 million held as cash and all the company properties, Canning and Cambay, are currently valued at $29.33 million.

As you can see, Oilex isn't even being valued on the Canning Basin assets let alone the Cambay holding which is now just one good well away from profitability. In fact you'd need a bleedin' 47.5% hike in the share price and you still wouldn't be any where near ready to blow the bloody doors off the underlying asset value."

I stood there speechless as he told me all this.

"Blimey mate, keep this to yourself otherwise" Sir Michael said as he ended the conversation along with his G&T, “it looks bad in the newspapers and upsets civilians at their breakfast to see how undervalued this company is".

As he strode toward the door his parting words were, "Bleedin' MM's, I dunno, if they ain't got you one way they've got you another. What's the answer? That's what I keep asking myself. What's it all about? Know what I mean?"