Posted today on LSE - poster DOGPOG
RRL Valuation today - 14/11/2010
With NCR P1+P2 PW10 now valued at US$106m, that gives NAV of 6.5p/share.
Add in TT 70bopd net current production, 0.55p/share NAV.
Add ECV P1+P2 PW10 valued at US$9.8m, 0.6p/share NAV.
Georgia 2008 assessment $102.5m net to Range, 6.35p/share NAV.
Puntland NAV is US$80m (based on accounts), 5p/share NAV.
This gives NAV/share, **based on current production and confirmed values** of 19p/share.
Ignore Georgia and Puntland and that becomes 7.65p/share!!!!
WE ARE STILL UNDERVALUED ON NAV FOR PRODUCING RESERVES.....
All costs based on fully diluted share issue 1.612404323bn.
What news is imminent?
Simply? Seismic on Georgia blocks accounting for 10% of Georgia's land mass.
There are oil seeps across our licences and previous soviet wells have been oil discoveries.
RPS Energy have analysed 3D seismic of our most prospective areas and the market will be updated this week.
The market expects 80mmbls recoverable net to Range.... Rumour has it that this figure is conservative to say the least.
Currently very little of the Georgia prospect is even factored in the RRL's MCAP....
Upside?
Assumptions:
GB£1=US$1.55
$79/bbl Brent Oil Price
$4.00/scf
1,612,404,323 shares fully diluted
Puntland
20% share, free carried for first $25m spend on first drill
Initial target Marood-1 now identified, multiple further targets
Estimated OIP for Dharoor – 3.62bn bbls
Conservative target 400mmbbls
NAV of 400mmbbls at $5 sell-on value ($1 net to RRL for 20% share) is $400m net (£258m) equiv to 16p per share fully diluted (4p per 100mmbbls recoverable)
Timescales – 6 month drill each approx, further appraisal drills may be quicker as complications of geology are established. First drill estimate Q1/Q2 2011.
Nugal is the additional block, arguable more prospective given the Conoco data interpretation, but partly on land with disputed rights between Puntland & Somaliland – higher risk.
Georgia
Independent analyst valuation 2008 of $205m ($102.5m net to RRL)
Estimated reserves in place of 383mmbbls plus 2400bcf gas (2400 billion cubic feet)
PSA is 35% of profits shared by RRL and Strait O&G (Georgia Gov. take 65% profit net of costs)
Est profit: $79/bbl less (approx) $25 F&D costs; $54*0.35 = $19/bbl
Initial drill target – 80mmbbls (not accounting for gas), multiple further targets
If successful, and intend to produce, then estimated value at approx $19/bbl profit for 80mmbbls is $1.51bn ($755m net to RRL), £488m, equiv to 30p per share fully diluted (3.75p per 10mmbbls recoverable)
Timescale – 4-6 months to drill 3 more appraisal wells to prove up P1/P90. First drill estimate Q4 2010.
Potential buyout - 100% working interest – would mean NAV of 7.5p per share per 10mmbbls recoverable
Working interest in two blocks, multiple targets
Texas
NCR
25% share of Smith#1, 20% of RB#1 and subsequent (est. 20 wells)
Smith#1
Producing 320boepd, 4mmcf/day
Estimate profit $35/bbl, $1.5/scf gives revenue of $4.1m (oe) + $2.19m (gas)
Total $6.29m / £4.058m pa
EPS of 0.25p or equiv to SP of 2.5p/share
Say Smith#1 indicative of average, so across 20 wells potential for SP value of 50p fully diluted.
(Conservative given restricted flow on Smith#1)
Timescale @ 3-4wells pa – 5-6 years until full value reached (approx 7.5-10p per year increase)
ECV
13.56% share
Potential for 22 wells with 220,000 bbls each
F&D costs $7.15/bbl, profit $70+/bbl
Estimate average 500bopd gives profit $1.732m pa net to RRL (£1.117m)
EPS of 0.0693p per well, or equiv to SP of 0.7p/share
22 wells – future SP value 15.2p
Timescale @ 3-4 wells pa – 6-7 year until full value reached (approx 2-3p per year increase)
http://www.investegate.co.uk/Article.aspx?id=20101008080834P8E2DTrinidad & Tobago
10% working interest in three fields – Morne Diablo, Beach Marcelle and South Quarry
Fully funded for future improvements, fully equipped drilling and production facilities
Additional prospective resources in drilling deep formations – 19.9mmbbls
Currently producing 700bopd (70bopd net to RRL), $0.767m profit pa, EPS 0.05p, SP support at 0.5p
Future management of wells to increase production to 3500bopd (350bopd net to RRL), $3.8m profit pa, EPS 0.24, SP support at 2.4p
Ultimate goal of 10000bopd (1000bopd net to RRL), $11m profit pa, EPS 0.7p, SP support at 7p
Timescales – 36 month target for 3500bopd (may be accelerated), 1000bopd/year increase
Conclusions / notional SP targets:
6 months – Puntland 6p; Georgia 15p; NCR 7.5p; ECV 1.4p; TT 0.5p = Total 30.4p
12 months – Puntland 16p; Georgia 30p; NCR 12.5p; ECV 2.8p; TT 1p = Total 62.3p
24 months - Puntland 32p; Georgia 60p; NCR 20p; ECV 6.5p; TT 2.5p = Total 121p
Home 
