EKS. LEI might still be a buy based on its holdings, and because it's not so well known as the bigger players. Otoh, I'm not watching it closely enough to know exactly what LEI controls. The mineral/oil rights are sold by levels, and so we may have different owners in the same lat/long. That is, one owner for the Three Fork Shale that lies below the Austin Chalk formation, and a different owner for the land (Austin Chalk) that's above the Three Forks.
Meanwhile I continue to hold my LEI shares. Stock closed @ $2.71 today.
From 6/11 Presentation, p. 15:
"Marathon paid (ed.:for its Eagle Ford acquisition)
$3.5 billion less $0.5 billion proved producing =
$3.0 billion divided by 140,000 net acres =
$21,400 per net acre."
"Lucas has
4,400 net acres times $21,400 per net acres =
$94 million divided by 22,460,000 shares =
$4.20 per share (fully diluted) Eagle Ford only"
HK has at least three shale areas. HK is being bought for $12B, plus I assume acquisition of net debt of $3B-1.5B = $1.5B (Yahoo numbers). So valuation is about $13.5B, for which in return BHP gets about 1 million acres of HK shaleholdings. So BHP is paying roughly $13,500 per acre for HK's various shales. Which, perhaps conservatively might be translated to LEI to be $2.64 per share for its Three Forks/Austin Chalk. Perhaps more, because not all shale areas are worth the same. Three Forks is more desirable now (I presume) than HK's other shales. Further, LEI apparently has maybe 16K of other land in TX in addition to Three Forks. Seems like LEI is still undervalued. At least relative to what larger shale companies are being bought out for. |
