Manfred,
I am new to investing and new to oil exploration/production in Kazakstan ( and elsewhere ). However, I did spend 2 years or so working for Atlantic Richfield, doing research into computer processing of oil exploration seismic data. Never went beyond the processing to evaluation, though. Other people did that.
Hurricane has estimated their oil reserves in Kazakstan at between 350 and 500 million barrels. Their stock is currently trading at Cdn $7.20 / US $5.3 ( assuming that the HHLa.TO stock price is in Cdn, and a discount rate of 1.36 ).
Everything else being equal ( which is not reality ), I would assume that when AIPC is in the same state of production operations, their stock will be valued at some multiple of Hurricane's value. That multiple could be based on the 1.1 billion barrels of potential AIPC reserves or some future larger figure, based on newer data.
At 1.1 billion barrels, the multiple would be 1.1/.35 = 3.1, or, using the higher value from Hurricane, 1.1/.5 = 2.2
Thus, we have a possible stock price for AIPC at some point in the future of 2.2 * 5.3 = $ 11.6 / share for AIPC, or 3.1 * 5.3 = $ 16.4 / share.
Of course, this type of calculation ignores all of the myriad details that will eventually go into the AIPC financial structure, and it ignores the potentially significant differences between AIPC and Hurricane. It also ignores all of the changes in the financial and political climate which may occur between now and the time AIPC goes into production.
But, I like the direction the calculations take us .... upwards in valuation for AIPC.
Your thoughts ?
Regards,
Donald Hart |
