It is actually better than you say: Gas at a value of 50c mcf in ground, which is commonly used means that a TCF to OXX would be valued at 500m :- 150m = > $3.00 per share.
OXX has 20% of Gigantor free carried for the firct two drills. OXX can also take the 16m US or free carry on first two wells in the other 3 permits if OMV/ENI decide to drill. Gigantor alone (forget about all the other prospects)has the potential to deliver a TCF to OXX and it will be drilled in 2011, probably the first half. Remember OMV/ENI are no bunnies. They have spent a lot of money on this. OXX all free carried on first two wells.
OXX holds 43,600,000 odd CUE shares as well as numerous other holdings.
Among those is 6% of MOG (another Albers controled entity)
So OXX has 4% of CUE with 15% of artemis and
6% of MOG with now 10% of Artemis.
4% of 15% and 6% of 10% means that OXX has a 1.2% indirect interest in Artemis. This is not inconsiderable when you take into consideration the size of the prospect and the fact that OXX has only 150m shares on issue when you take off the Dovedale holding as OXX is the beneficary of this holding. In fact a rough valuation would look something like this.
Say Artemis proved up 6TCF. Conservative considering MEO spruiks it up at anything up to 12TCF then:
6TCF x 1.2% = 72mmcf @ 50cents per mcf = 36m or 25cents per share. Then there is the ORR on the Shell blocks, Winchester, Cornea, and other rats and mice.
The ORR and discovery payments on the Shell blocks could be huge. We will know soon enough whether or not Shell is going to drill.
But you are right about OXX. This is by far the best spec oiler on the ASX atm in my opinion. And at the moment it is not even on the radar. OXX could easily be a 10 bagger and more and relatively soon with little risk or cost to OXX. All for a co that is trading at value of cash and holdings with very modest future expenditure. That is if you can get hold of any!
OXX Price at posting:
27.5¢ Sentiment: None Disclosure: Held
