RRL Current Value- Diamond Don

Given all the recent activity on the bb, this could almost be construed as 'off-topic' !!

As part of my research I looked at p/b ratio of RRL, not exactly rocket science or 100% reliable for this sector, but would be interesting to compare to other small-cap oilers if anyone has worked out similar?

I've updated this to recent information:

Market cap at 884m shares, so at 3.75pps - £34.476m GBP

Assets:
Texas - US$226m - £155m GBP (from reserve report)
Georgia - US$105m - £72m GBP (pre-seismics valuation 2008)
Puntland - A$83m - £47m GBP (est. asset sale value stated in accounts)
Financial assets - A$1.5m - £0.9m GBP (from accounts)
Total assets £274.9m GBP

Liabilities:
Borrowings - A$3m - £1.75m GBP
Texas - £0 (all paid)
Georgia - £5.6m GBP (based on dilution effect of 70m shares and 70m options total)
Georgia - US$6m [Phase II commitments] - £4.1m GBP
Puntland - £2.2m GBP (based on dilution effect of 45m shares and 11.25m options)
Puntland - US$20m [payable after 1st 4 wells] - £13.8m GBP
Total liabilities - £27.45m GBP

Net asset value (NAV) of £247.45m GBP

That is therefore 34.476m divided by 247.45 giving a P/B ratio of 0.139, meaning that at 3.75p we are trading at just 13.9% of our NAV.

That either means it's unbelievably undervalued, or something is fundamentally wrong with the company, and if you've done your research then you'll know it's not the latter...!

All this is my own research and may mean b*ll*cks-all to anyone else, but thought I would share this with you to distract from the 'bell-ends' and other derampers.

FYI, my research (and also thanks to iPedro's useful NAV spreadsheet) re. potential of Puntland estimated a NAV of £1.15 billion GBP, with just 500mmbbls P1 ........ (now compare that to current value of £47m!)

If anyone has worked out p/b on other oileys, it would be v.interesting to see the ratios.

Best of luck all holders, Diamond

Values as at 1/6/10:

Texas (P1 only): US$36m
Georgia (2008 valuation): US$102.5m
Puntland (from accounts): US$68m

Total: US$206.5m = GBP£141.77m

Shares in issue 787.57m = NAV/share of £0.18

Current share price at 2/6/10 £0.0438 (24% of NAV) means a pretty heavy discount to value.

Open to interpretation, and all IMHO of course.

Happy days!

Over the coming weeks this stock will be significantly rerated.

Those who have initiated coverage on Range, namely, RHPS, OPL, Edison and Proactive (and others soon to follow) will all have to reset their valuations as news comes in from the following;

Smith1 upgrade post fraccing
RB1 TD reached and commentary on any oil/gas shows
UPgrade of P1,2 and 3 associated with above
New deal in America's
Georgia ready to drill targets announced and associated strategy
AOI rig mobilisationa and spud timetable together with target reserve

It's gonna be one hell of a ride folks and fun to watch

jr

Im expecting 10p in the next two weeks. That would make our market cap about £100mill which i think is a good value at this stage considering we are producing and are targeting massive reserves.

does anyone have any companies we can compare market caps with???

TRP rose to £150mill drilling for a few hundred million barrels, they dont produce plus we are targeting 18billion barrels!

PL recently quoted 'our market cap could easily be $500mill with what they have planned for this year'

ADMIN wrote:

Im expecting 10p in the next two weeks.
does anyone have any companies we can compare market caps with???

BP

D/D I am not one for doing calculations as you Twissso,Mega and some others can do,but even if you are close (which in my research i am sure you are) then i totally agree how low this sp is.Daveson has also written a post explaining why and how the MMs have kept the price down.He believes the remaining placement finalised next week will allow us to start moving towards our next level followed by RNSs to push the price onwards and upwards.If PL continues to purchase/buy into further projects and everything else goes according to plan, the figures you have shown will even look punitive compared to the realisation of this company.I have never invested in a company that has so much potential where ever you look.The RNS i am most looking forward to is the new proposition.For if this is as good as it is meant to be(Nav up 50%) then a couple more like that before Geogia/Puntland would be incredible.