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There is two methods to value the Colombian deal for Rochester. Cash flow and net asset value. The asset value is the first I'll attempt.
30 million barrels X $15 net U.S. per barrel = $450,000,000 million
450,000,000 U.S. X 1.3 (U.S. to Cdn conversion) = $585 million
$585,000,000 X half to Ecopetol (government) = $292 million
$292,000,000 X .25 Rochesters share = $73 million
$73,000,000 divided by 25,000,000 ROR fully diluted = $3.00 per share asset value
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- on average each well flows 1,500 barrels per day
- neighbouring fields contain 7 wells per 30 million barrel field
1,500 barrels per day X $15 net U.S. per barrel = $22,500
$22,500 U.S. X 1.3 (U.S. to Cdn conversion) = $ $29,250
$29,250 X 365 days = $10,676,250
$10,676,250 X half to Ecopetrol (government) = $5,338,125
$5,338,125 X .25 Rochesters share = $1,334,531
$1,334,531 divided by 25,000,0000 ROR fully diluted = .06 cents per share
.06 cents X 7 wells = .42 cents per share
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Other Facts
-Ecopetrol does not back into every deal and we think this is to small for them
-to have 25,000,000 shares outstanding would mean that warrants were exercised at .50 cents putting $5,000,000 in the bank.
-there are three other targets in Colombia that ROR is fully carried on
-Rochester currently has $1,000,000 in the bank and are looking at other deals
- potential reserves are between 10 -55 million barrels
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Harken(HEC-AMEX) has a 50% interest, Rochester(ROR-VSE) has 25%, and Parkcrest(PKC-ASE) also has 25%.
Cheers
Peter
phogan@cyberion.com |
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