Kevin, Perhaps you are correct. However, I can not believe
that if AOW lost the Gemini, i.e, if the court restraining
order had not been issued on the 30th of Aug, that it would
not have affected AOW's share price. The Maderia property would have been sold to Hislop,and the Pannonian deal would have evaporated. Basically AOW would have had it's assets
removed. Do the math on what the Pannonia deal entailed.
I'll just reiterate a little:
> $230K for Maderia;
> Guaranteed 9 more wells in the next two years with no cost to AOW;
> $1,000,000 cash to AOW minimum payment by Panonian over
the next two years;
> for no cost AOW gets 25% interest in those 9 wells;
> Pannonia pays the cost for the first well after the
$550K is paid by AOW;
For example, if these ten wells produce an average of
1 mmcfd per day after 12 month and AOW receives 1/4 of that
production. That's 2.5mmcfd for AOW. That according to my incredibly conservative guessimates would be a min. of $2500 per day. That comes out to $900,000 per year on a 360 day year.
Multiply that times 5 to 10 (depending on how many wells
will actually be completed) remember, even if a well is
D & A, AOW still gets the $100k!
Now, toss a multiple on the PE of stock.
I think one would have to agree that the fair price of
the stock under these circumstances would be somewhere north
of $1.00.
Now, in the second example, take away the Gemini, Sell the
Maderia. AOW now has $200k from the Maderia and what ever
cash is currently in the bank.
Based on this, I'd definitely say the stock is way over
valued at it's current level-- In my opinion the stock
would be worthless.
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