valuation

Today has seen some wild numbers thrown around on MOG regarding WA 360P.
If we use MEO value of WA 360P (refer July ASX presentation) they come up with a value of $830M based on 9.5TcfGIP& assume they retain 20% equity, based on 70% Recovery Factor, US$0.50/mcf, FX$0.80. So on MEO valuation in presentation 15% would be around $622.5m.
If MOG has approximately 81.805m shares (79.505m plus 2.3m options) at present fully diluted an additional 120 million would take this figure to approximately 201.8m on issue. Based on these figures MOG could be valued at $3.08 a share.
But we need to remember the following:
1. MEO trades at a faction of its $2 per share valuation for this project i.e. less than 1/3.
2. MOG only had $472,000 in the bank at 30/6/2009 so this event will most likely trigger a capital raising.
3. With MOG trading in the 30-40 cents range it would seem to indicate MOG does have upside potential based on MEO valuations of the project.
4. Market will only recognize part of this potential, but it does look like a good deal for MOG shareholders.
5. Please do your own research on this project because it is a highly speculative stock & incorrect calculations can be very costly.
Regards
Buffett